A prescription drug purchase plan initially designed two years ago in an effort to reduce the state's burgeoning Medicaid costs is back on the drawing board.

Dr. David Sundwall, director of the state Department of Health, told the Legislature's head budget committee Tuesday that a "preferred drug list," or PDL, could save millions of dollars a year in prescription drug costs. Essentially, the PDL would create a registry of drugs doctors could prescribe to patients that would ideally encourage the prescribing of medications that often have been around longer but are as effective as the new and usually more expensive ones.

The department made its case during an interim meeting of the Executive Appropriations Committee, hoping to secure approval for an initial PDL on a few classes of drugs. The committee only heard testimony from supporters of the bill, although they plan to hear from opponents — including pharmaceutical representatives — next month.

Medicaid is the joint state/federal health insurance for the poor and disabled that is the third-largest insurance plan in Utah as well as the largest portion of the state's budget outside education funding.

While always anxious to find a way to curtail the costs of Medicaid, leaders remained skeptical about the proposal Tuesday. Primarily, they feared that it would create artificial market controls on prescription drugs and unfairly impact Medicaid patients, concerns which Sundwall dismissed.

"A PDL gets the best possible drugs into the patients' hands at the best possible price," he said.

Even with estimated reductions in drug costs, the Medicaid program and prescription drug costs will continue to rise, Sundwall said. But instead of annual increases that can exceed 10 percent, the prescription drug costs would probably only jump 3 to 4 percent annually.

Senate Majority Leader Pete Knudsen, R-Brigham City, expressed concerns that the short-term savings might actually cost the state more money in the long run, however, because patients are not receiving the best-quality medical treatments.

"You can save money on one side of the fence but spend it on the other side," he said. "Our comfort zone has to be approached on this, because what we do affects the lives of others."

Two years ago, the same committee for similar reasons mentioned Tuesday told the health department to keep tabs on similar efforts in other states but to essentially put the cost-cutting plan on hold. Although Medicaid clients, providers and area hospitals had endorsed setting up cost controls such as prior authorization, use limits and more generic drugs, others told lawmakers a PDL is fraught with hidden costs and medical practice hang-ups.