O'Malley to pull $2.3b prescription drug contract
Gov. Martin O'Malley will defer a Board of Public Works vote on a contested $2.3 billion prescription drug contract until an appeals process is finished, according to a spokesman.
O'Malley's Department of Budget Management wants to award the mega-contract to an out-of-state firm with a history of complaints in more than two dozen states, including Maryland, of swapping drugs on patients. The company, Express Scripts, offered a price for the five year contract that came in $50 million less than the closest competitor.
The Maryland-based Catalyst Health Solutions Inc., which currently holds the contract, has filed multiple protests contesting the new award. O'Malley's decision will delay transferring the lucrative work until after the State Board of Contract Appeals process is finished, which could take a year.
"This is fairly standard for a contract of this size," said O'Malley spokesman Shaun Adamec. He added that the Maryland company should be able to "exercise all of its options."
Some in O'Malley's administration had previously argued that the potential savings from the new contract of roughly $15 million in the next budget was enough to operate outside the usual framework.
The contract is to manage the prescription drug program for 200,000 current and retired state workers over the next five years. The company would process drugs claims and negotiate lower prices for medications with pharmacies and manufactures.
Catalyst, based in Rockville, won the contract five years ago from another firm. However, Catalyst had to wait a year before receiving payments from the state because of protests filed by the company that they beat.
O'Malley's Department of Budget Management wants to award the mega-contract to an out-of-state firm with a history of complaints in more than two dozen states, including Maryland, of swapping drugs on patients. The company, Express Scripts, offered a price for the five year contract that came in $50 million less than the closest competitor.
The Maryland-based Catalyst Health Solutions Inc., which currently holds the contract, has filed multiple protests contesting the new award. O'Malley's decision will delay transferring the lucrative work until after the State Board of Contract Appeals process is finished, which could take a year.
"This is fairly standard for a contract of this size," said O'Malley spokesman Shaun Adamec. He added that the Maryland company should be able to "exercise all of its options."
Some in O'Malley's administration had previously argued that the potential savings from the new contract of roughly $15 million in the next budget was enough to operate outside the usual framework.
The contract is to manage the prescription drug program for 200,000 current and retired state workers over the next five years. The company would process drugs claims and negotiate lower prices for medications with pharmacies and manufactures.
Catalyst, based in Rockville, won the contract five years ago from another firm. However, Catalyst had to wait a year before receiving payments from the state because of protests filed by the company that they beat.
Comments
I wonder. Does the state have the right to include poor/inadequate performance standards that if not met the 5 year contract can be terminated with penalty fees (paid by the vendor, not the state)? Wouldn't it be nice if vendors realized non-performance COULD result in refusal of payment or termination!
Posted by: Mac | March 22, 2011 9:39 PM
Yes, the state certainly can include performance standards in its contracts. But even successfully-performing contractors have difficulty getting timely payments from MD, so maybe poor performance penalties aren't that much of a disincentive.
Posted by: Naked Ernie | March 23, 2011 12:18 PM
The clinics for pain have been closed by the sale of prescription drugs - hydrocodone, vicodin, percocet and lortab - many people use them improperly and do not mention their side effects. It should be noted that these clinics were selling medicines without a prescription.
Terence Mc Gregor
Findrxonline
Posted by: Terence Mc Gregor | March 23, 2011 4:18 PM
So instead of patients and doctors deciding what drugs they get and from whom, the state has now made sure that politicians, bureaucrats, lobbyists, corporate executives, lawyers and judges handle the supply of prescription drugs to Maryland state workers.
As I explain at larson4liberty.com, this is a perfect example of what mess Obamacare will create once it has socialized our entire health care system.
Posted by: Larson4Liberty | March 23, 2011 5:32 PM