New Pharmaceuticals Contract Will Save State Nearly $18 Million

Agencies leverage state’s massive buying power to cut costs.

Published on January 17, 2013
in State Contracts

The California Department of General Services (DGS) today announced a new statewide pharmaceutical contract that will save the state nearly $18 million by leveraging the buying power of several state agencies acting as a single buyer.

The contract will be used by state prisons, state hospitals, and state developmental centers, including the California Correctional Health Care Services, California Department of Developmental Services, California Department of State Hospitals, California Department of Juvenile Justice, California State University System, and other state and local agencies.

“The various state entities that purchase pharmaceuticals are working as partners on the procurement process in order to leverage their collective buying power,” said DGS Director Fred Klass. “DGS initiated the Pharmacy Procurement Collaborative that has resulted in better pricing, better accountability, and will save the state millions of dollars in drug costs.”

California state agencies purchase upwards of $300 million worth of pharmaceuticals a year. Prior to the Pharmacy Procurement Collaborative, some agencies negotiated separate pharmaceutical contracts, instead of leveraging the state’s collective buying power as a single buyer. The new pharmaceutical wholesaler contract, awarded by DGS to AmerisourceBergen Drug Corporation following a competitive bidding process, is projected to save $17.4 million over the life of the agreement.