Governor Polis, State Employees Celebrate New Cost Savings on Prescription Drug Coverage
Denver, CO – As of July 1st, Colorado has switched to its newly selected pharmacy benefit manager (PBM), MedImpact, which is expected to save the state millions on healthcare costs and help modernize procurement of prescription drugs.
The Colorado Department of Personnel and Administration (DPA) selected MedImpact through a competitive reverse auction process created by a bipartisan bill passed in 2021. The bill required potential PBMs to bid against one another to deliver lower cost prescription drug coverage for state employees. With the award of a new PBM contract, the state is estimated to potentially avoid more than $22 million in costs over the next five years without reducing drug benefits for state employees, which directly advances the Governor’s commitment to help Coloradans save money on healthcare.
Governor Jared Polis, state lawmakers and Colorado WINS welcomed the switch to the new PBM and applauded this commonsense solution to save the state millions on healthcare:
“This new partnership saves taxpayer money while ensuring hardworking state employees have access to quality prescription drugs,” said Governor Jared Polis. “And is part of our ongoing work to make healthcare more affordable for Coloradans.”
“In a tough budget year like this, the competitive process created by our bill creates a real bright spot,” said state Senator Barbara Kirkmeyer, cosponsor of the Competitive Pharmacy Benefits Manager Marketplace Act (HB21-1237). “This legislation also allows us to continue to hold PBMs accountable moving forward by creating a real-time, electronic claims review of each PBM invoice. This will ensure we save a significant amount of money for the state while taking care of our public servants who provide valuable services to our residents. We are excited to see that the PBM reverse auction process worked just as intended, and the state was able to secure millions in cost avoidance without cutting benefits.”
“The costs of prescription drugs have risen three times faster than inflation over the last 10 years, and as elected officials we have a responsibility to take action,” said former state Rep. Susan Lontine, cosponsor of HB21-1237. “This bipartisan initiative has modernized how the state buys prescription drugs, and created the opportunity for the state to save millions without reducing benefits for state employees. This is a win-win for everyone.”
“As the union representing more than 25,000 state employees, we were thrilled with this outcome, and we expect to see savings into the millions,” said Skip Miller, President of Colorado WINS. “Not only are we reducing state healthcare costs, we are doing it while providing quality benefits for state workers. This is a victory for everyone. The next step will be to monitor the PBM’s compliance with the state’s new and improved PBM contract. The ongoing electronic review of all PBM invoices required by the statute will assure that Colorado maximizes savings for the state and the state employees.”
PBMs manage prescription drug benefits for public and private health plans, and often receive significant discounts and rebates from drug manufacturers. However, PBMs reap large profits from their business with states in which they have faced little to no competition. The reverse auction process and ongoing electronic bill review conducted by the state of Colorado ensures that MedImpact, the state’s new PBM, will be held to the highest standards, delivering savings on prescription drugs to state employees and Colorado taxpayers.