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21 Jan 2013

California consolidates state agencies

California rolls state departments into one to cut pharmaceutical costs.

The Californian Department of General Services (DGS) has announced it intends to make savings of up to $18 million on its pharmaceutical bill by consolidating the buying power of several state agencies to act as a single buyer.

Representatives from state prisons, hospitals and development centres will all sign the same contract, allowing them to act as partners in the procurement process and bring down California's annual $300 million pharmaceutical bill.

Prior to the change, which is being referred to as the Pharmacy Procurement Collaborative, a number of agencies negotiated separate contracts, thus lowering the buying power of the overall state.
"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," said DGS Director Fred Klass.

The move follows a new pharmaceutical wholesaler contract from the state, awarded to AmerisourceBergen Drug Corporation, which followed a competitive bidding process and is expect to save the medical department around $17.6 million.

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