COLUMBUS — A Loveland company that's helping four state governments save millions in prescription drug costs can't get the time of day from Ohio officials looking to do the same thing.

        Executives at Provider Synergies say they know how to get discounts from drug manufacturers for the increasingly pricey pills swallowed by thousands of poor and elderly Ohioans in the state's Medicaid program. They have already done this for Medicaid programs in Florida, Illinois, Louisiana and West Virginia.

        Ohio Department of Job and Family Services officials say they don't have the time to listen to the company's pitch, let alone put their drug rebate plan up for bids. Although they don't have a deadline to put the plan in place, they're going to give the job to First Health Services Corp., a Virginia-based company that currently handles Medicaid payments to Ohio pharmacies.

        “We have an existing contract (with First Health) with which it's possible to do this,” said agency spokesman Jon Allen. “The sooner this gets started, the sooner money gets saved.”

        Dan Kincaid, Provider Synergies' vice president said he doesn't believe time is an issue and said he's frustrated the state refuses to shop around.

        “If you have two options, why would you only talk to one?” Mr. Kincaid said. “Even if we weren't an Ohio company, I think they would want to talk to us.”

        This is the latest criticism aimed at the department, which has been under fire several times in the last year for the way it handles contracts and for failing to put them up for bid.

        At the center of the controversy this time is the spiraling cost of Medicaid that has officials in Ohio and other states scrambling for solutions.

        Prices for prescription drugs, including such name brands as Claritin, Zocor and Lipitor, have gone up an average 18 percent a year.

        Increased drug prices and other rising medical costs have Ohio Medicaid officials warning the state it will need another $2 billion to cover costs over the next two fiscal years. Nationally, at least 33 other states have passed or are examining different ideas to reduce drug costs.

        The rebate program Ohio lawmakers passed in May would let state officials create a list of drugs preferred for the 1.5 million Ohioans covered by Medicaid. Drug makers could get their medicines on this list if they agree to up-front rebates to reduce the cost of the prescriptions.

        Companies that would not give rebates would have a harder time selling their medicines to Ohio Medicaid patients. That's because doctors who want to prescribe drugs not on the list would have to first get state approval for each prescription .

        Only nine states have similar rebate programs. Provider Synergies has designed four of those. First Health installed plans now used in Michigan and Vermont.

        Florida officials estimate drug rebates saved $130 million in Medicaid funds last fiscal year. Michigan figures to save about $42 million in its program's first year. Ohio estimates its plan would save about $35 million a year.

        Mr. Kincaid said Ohio officials have given First Health an inside track simply because it already does business with the state. First Health gets $1.7 million a year to process Medicaid bills that pharmacists submit for prescription drugs.

        “We feel that we can do the job,” Mr.Kincaid said.

        First Health spokesman Scott Allocco declined to comment, saying it would violate corporate policy to discuss ongoing negotiations.

        The amount of money either company would get to set up Ohio's drug rebate plan is not big by state standards, perhaps $1 million or less. But Mr. Kincaid said Synergies would likely create four to six new professional level jobs here in Ohio if it got the state's business.

        That angers state Rep. Jean Schmidt, R-Loveland.

        “We're sidestepping an Ohio company,” Ms. Schmidt said. “This could bring money and jobs to my district. If they only have to hire a new secretary, that's another job.”

        Mr. Allen said it could take up to a year to put together a drug rebate plan if the state asks private companies to submit bids. He also said the agency has no formal deadline to put that plan in place.

        “We haven't put an "X' on the calendar,” Mr. Allen said. “Even when an agreement is in place to do this it will still be months after that to get this rolling, and we want to start to incur some savings this fiscal year.”

        Mr. Kincaid said Synergies put together Florida's rebate plan in one month. George Kitchens, director of the Pharmacy Services Bureau for Florida Medicaid said that's about right. “We felt at that time that nobody could provide the services they could within that time frame,” Mr. Kitchens' said of Synergies.

        Mr. Allen said federal Medicaid regulations restrict the agency from showing any preference to in-state companies. He also would not say how much the state plans to pay First Health to take on drug rebates because those talks are still under way.

        “It is within our legal right and ability to be able to include (drug rebates) with this existing provider and that is what we are looking at right now,” Mr. Allen said. “We certainly think this is the right.”

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