HARRISBURG -- It's normal for Republican lawmakers to give Democratic Gov. Ed Rendell a hassle over his legislative initiatives.

But when 18 state House Democrats from Allegheny County come forward to block one of his money-saving ideas -- now that's unusual.

The Democratic rebellion is happening now over something called "Smart Pharmacy," which would change the way the Department of Public Welfare pays for drugs for lower-income people in the federal Medicaid program, which the state calls Medical Assistance.

Currently, the drugs for 1.2 million Medicaid recipients are bought and distributed by seven "managed care organizations,'' which are for-profit or nonprofit health insurers, located in southwestern and southeastern Pennsylvania because that's where most of the Medicaid recipients live.

The state Welfare Department wants to change the system so that it would be able to buy pharmaceuticals directly for the people who receive Medicaid. With the state doing the buying, it would be eligible for federally mandated drug price rebates. If the Legislature approves, the change would take effect July 1.

Welfare Secretary Estelle Richman said that would save the state $146 million a year in the money it now pays to MCOs, which aren't eligible for the rebates from the drug companies. The change would constitute just a small part of Mr. Rendell's effort to reduce a $3 billion budget deficit, but every cent counts.

"Pennsylvania is facing a budget shortfall now, and the savings from Smart Pharmacy will help us maintain Medical Assistance services for every low-income, disabled Pennsylvanian who relies on the [program]," Ms. Richman said.

With the welfare department as "the single purchaser of [Medicaid] medications, it will allow Pennsylvania to receive discounts that are seven times greater than those available to the managed care companies," she said, adding that 21 other states have already adopted a similar drug-buying program.

Michael Nardone, the DPW deputy secretary for Medical Assistance, said, "We are under a lot of pressure to reduce the costs of the Medicaid program."

Republican legislators, in particular, regularly complain about the costs of Medicaid, which is one of the major items in the state's $28 billion budget.

The MCOs in the Pittsburgh area that would be affected by the drug-buying shift include some big names, such as UPMC For You, a subsidiary of the University of Pittsburgh Medical Center, and Gateway Health Plan.

They oppose the change in drug-purchasing policy, claiming it will unnecessarily complicate medical care for Medicaid recipients and cause confusion.

"We are opposed to [Smart Pharmacy] because it impedes our ability to manage the quality and the cost of care for Medicaid people,'' said UPMC's John Lovelace. "But we do understand that the state is in a difficult budget position.''

The Allegheny County Democrats in the House contend the existing MCO drug-purchasing system is working well. The MCOs "have served Pennsylvania well by lowering the rate of health-care cost escalation ... and producing vastly improved access to medical care for our most vulnerable citizens," the 18 legislators said in a letter to the governor.

Changing the way the drugs are purchased, the legislators contended, "will fragment and disrupt a mature, pro-active, integrated and cost-effective healthcare delivery system."

If MCOs no longer handle drug purchases for Medicaid recipients, it will hurt their ability to "manage the whole person" and respond to a person's illness, the legislators said.

Legislators opposed to the new system for buying drugs for Medicaid recipients include Reps. Dan Frankel, Paul Costa, Chelsa Wagner, Dom Costa, Dan Deasy, Tony DeLuca, Frank Dermody, Marc Gergely, Nick Kotik, Bill Kortz, David Levdansky, Joe Markosek, Rob Matzie, Joe Preston, Harry Readshaw, Matt Smith, Don Walko and Jesse White.