On October 25, Governors Jeanne Shaheen (D-NH), Howard Dean (D-VT) and Angus King (I-ME) jointly announced their three states would come together to create a regional purchasing pool for prescription drugs to help create a buyer's market for Medicaid beneficiaries, and ultimately, for uninsured and under-insured citizens.

The three states will begin by pooling their drug purchases for the state-run Medicaid program for low-income families, which will help give 330,000 Medicaid beneficiaries better prescription drugs while saving state taxpayer dollars. But eventually, the three governors plan to expand the pool to cover state and local employees, small businesses, and most of all, people with little or no insurance coverage for prescription drugs, including seniors. Until Congress can agree on a way to modernize Medicare to include a prescription drug benefit, efforts such as the northern New England purchasing pool will give seniors critical help. And even if the federal government does address this problem, a Medicare benefit will do nothing to help the millions of non-elderly Americans who are not covered by Medicaid or private prescription drug insurance.

Best of all, the regional plan will rely on market mechanisms rather than arbitrary price controls to lower the cost of prescription drugs. The three states will employ a pharmaceutical benefits manager to negotiate prices with pharmaceutical companies. The idea is similar to the Progressive Policy Institute's proposal for consumer cooperatives to purchase prescription drugs for Medicare beneficiaries.

Said Governor Shaheen: "The Northern New England prescription purchasing pool is a creative, commonsense solution to a challenge facing all of our states."