Bristol-Myers Squibb's agreement with Florida Medicaid will call for the company to spend at least $4.4 mil. on disease management programs in exchange for formulary status for all of its products.

The company will invest $4 mil. to implement community-based health management programs in the state under an agreement announced Sept. 5. Bristol will pay an additional $200,000 a year for two years to allow the state to monitor the impact of the program.

The $4.4 mil. in payments represents the minimum cost of the agreement to Bristol.

The company is guaranteeing a total savings to the state of $16.3 mil. from the programs. Bristol is required to make up the difference if the savings do not meet the target.

The Bristol agreement follows the formula established by Pfizer as an alternative to direct supplemental rebates that the state requires for the Medicaid program.

Pfizer is guaranteeing savings of $33 mil. to Florida in exchange for formulary status for all of its products (¹ Also see "Pfizer Florida Formula: Free Goods In Exchange For Formulary Status" - Pink Sheet, 21 May, 2001.).

The Bristol agreement is in line with the financial terms of the Pfizer deal.

Bristol is guaranteeing about half as much as Pfizer in savings, and its products represent about half as much in terms of cost to the state. Florida Medicaid spent $59.6 mil. on Bristol products last year, compared to $113 mil. for Pfizer products.

In percentage terms, Bristol's guaranteed savings are the equivalent of a 27% rebate. The up-front investment of $4.4 mil. is a much smaller cost to the company, the equivalent of a 7% rebate.

As with the Pfizer agreement, Bristol will not necessarily have to make up the guaranteed savings amount in cash. The company can use free goods instead.

Two of Bristol's key products, the cholesterol-lowering agent Pravachol (pravastatin) and the antithrombotic Plavix (clopidogrel), were not included on the Medicaid formulary adopted by the state after the rebate program took effect. Bristol told investors in July that the exclusions should not be considered final (² Also see "Florida Medicaid Formulary Exclusions Are Not Final, Bristol Tells Investors" - Pink Sheet, 30 July, 2001.).

Bristol's negotiations with the state may have been helped by the withdrawal of Bayer's cholesterol drug Baycol (cerivastatin) which was on Florida's preferred drug list.

In the retail market, the initial reaction in the wake of the withdrawal was an increase in use of Pravachol (³ Also see "Baycol Withdrawal Gives Boost To Pravachol; Will Crestor NDA Be Affected?" - Pink Sheet, 13 August, 2001.).

If prescribers become more wary of high-potency agents in the wake of the Baycol withdrawal, it may not be feasible for Florida to continue to exclude Pravachol.

Although Pfizer and Bristol have come to terms with Florida, the Pharmaceutical Research & Manufacturers of America is continuing its lawsuit against the supplemental rebate program.

Florida says it has negotiated more than $60 mil. in rebate agreements since the law took effect July 1 (⁴ Also see "Florida Medicaid Has Negotiated $66 Mil. In Supplemental Rebates" - Pink Sheet, 10 September, 2001.).

Florida is understood to be in negotiations with other manufacturers for alternatives to supplemental rebates. However, with each new agreement it becomes more difficult for manufacturers to offer programs that do not duplicate efforts already under way.

The Bristol disease management effort will be focused on African American and Hispanic populations with breast cancer, cervical cancer, lung cancer, depression and HIV/AIDS.

The company will also employ promatoras (lay health workers) to improve quality of care and compliance with medications for "Hispanic Medicaid patients with diabetes, cardiovascular disease and depression." AHCA explained that "the use of promatoras is designed to overcome cultural and language barriers to health education and prevention."

Pfizer will fund 60 nurse case managers for Medicaid beneficiaries with asthma, congestive heart failure, diabetes and hypertension. The company will also fund statewide health literacy efforts.

Bristol Follows Pfizer Formula For Access To Florida Medicaid

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