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From: [EMAIL PROTECTED]
Date: Tue, 15 Jun 1999 18:40:47 EDT
Subject: Conn. Eyes Indian Tribe Alliance

Conn. Eyes Indian Tribe Alliance
.c The Associated Press
 By BRIGITTE GREENBERG

With the cost of providing medicines to the poor rising dramatically, the
state of Connecticut is considering an unusual alliance with a wealthy Indian
tribe which uses its status as a sovereign nation to beat the drug prices of
health maintenance organizations and pharmacy chains.

The Mashantucket Pequots, who made a fortune in casino gambling, have a side
business in called the Pequot Pharmacy Network, which has provided many
Connecticut employers and group insurers with prescription drugs since 1991.

As a federally recognized tribe, the Pequots have access to a federal pricing
schedule for pharmaceuticals that is lower than that offered to health
maintenance organizations and local and chain drug stores.

``When we met with the Pequots, they described their purchasing power and ...
their ability to attain the lowest possible price,'' said Michael Starkowski,
deputy commissioner of the state Department of Social Services. ``They
described to us a pricing schedule that would be 40 to 50 percent less than
what we would be paying otherwise.''

The state Legislature last week mandated that the department reduce its
pharmaceutical expenditures by $21 million. Department officials anticipate a
cost of $226 million this year for Medicaid pharmaceuticals. Negotiations
between the state and the Pequots could begin in the next few weeks,
Starkowski said.

The decision would affect about 85,000 elderly and disabled Medicaid patients
in the state.

The Pequots Pharmaceutical Network currently dispenses more than 1,700
prescriptions per day with the assistance of a robot that handles about 225
of the most commonly prescribed drugs. The network ships out by mail-order
about 1,500 prescriptions per day, while about 225 are picked up by tribal
members or tribal employees at a pharmacy on the tribe's reservation in
Ledyard.

Under the proposal, Medicaid patients would still go to a local pharmacy to
pick up their prescriptions, but the pharmacists would only get a handling
fee because the medicine is actually just shipped to the store from the
Pequot Network.

State Attorney General Richard Blumenthal said Tuesday he is reviewing
whether the agreement would be legal.

``There are a slew of legal questions that have to be answered,'' Blumenthal
said.

Blumenthal said that what concerns him most is the idea that the tribe's
sovereignty could allow it to claim immunity for mistakes or other issues of
liability in the sale of the pharmaceuticals.

However, the tribe already has liability insurance and the Department of
Social Services would purchase liability insurance separately to answer such
questions, Starkowski said.

Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers
of America, an industry group in Washington, D.C., said the state should not
have to circumvent manufacturers, pharmacies and HMOs in order to save money
and that the deal would give consumers fewer options.

``The state is trying to find some easy out,'' Grayson said. ``It seems to us
that it would be better for the state, rather than to try to find a loophole
in the law, to work within the existing statutes.''

AP-NY-06-15-99 1840EDT

 Copyright 1999 The Associated Press.  The information  contained in the AP
news report may not be published,  broadcast, rewritten or otherwise
distributed without  prior written authority of The Associated Press.

Reprinted under the fair use http://www4.law.cornell.edu/uscode/17/107.html
doctrine of international copyright law.
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