Industry-sponsored disease management services have saved the Florida Medicaid program approximately 11%, according to an analysis prepared for the state legislature.

The "value-added" programs saved the state $29.5 mil. in 2001 and $35 mil. in 2002, according to the analysis by the Florida legislature's Office of Program Policy Analysis & Government Accountability.

Pfizer and several other companies have provided disease management programs and guaranteed savings in exchange for formulary access under Florida's Medicaid preferred drug list.

While the report found that the programs saved money, it maintains that the state would have saved an additional $30 mil. in 2002 by receiving supplemental rebates instead of value-added programs.

Pfizer, which guaranteed $33 mil. in savings to the state from programs focusing on asthma, hypertension, congestive heart failure and diabetes, has been the most aggressive in touting the Florida experience as a model for demonstrating the value of pharmaceutical care. The agreement was negotiated directly with Florida Gov. Jeb Bush (R). Pfizer is preparing its own report on the results from the first year of its program (¹ Also see "Pfizer Florida Medicaid Accounting Will Be Ready In March; Is Texas Next?" - Pink Sheet, 24 February, 2003., p. 19).

The Florida legislature found that products covered by supplemental rebates generated savings of over 20% to the program. Overall, Florida's preferred drug list saved the state $123 mil. in 2001, including $46 mil. from supplemental rebates.

Spending on mental health and HIV drugs, which are exempt from formulary restrictions, increased 5%-6%.

OPPAGA is recommending to the legislature that supplemental rebates should be required for all products on the preferred drug list. Rather than eliminating the disease management programs, OPPAGA recommends that they be funded using a portion of the supplemental rebate income. The report is expected to be issued publicly the week of April 7.

The state Senate Appropriations Committee is considering a bill that would eliminate the Florida Agency for Health Care Administration's authority to negotiate for disease management services in lieu of supplemental rebates.

The contracts for the disease management programs expire June 30, but include provisions for renewal.

If the contracts are renewed, it would only be on terms less favorable for the drug companies, Florida Medicaid Pharmacy Services Program Manager Jerry Wells told the Medicaid Drug Rebate Congress in Arlington, Va. April 1.

Wells said his office did an internal analysis that reached a similar result to the OPPAGA report. Wells added, however, he supports the programs provided the terms are appropriate.

"Fortunately, I didn't have anything to do with [the analysis] because it wasn't popular in the Governor's office," he said. The bottom line conclusion from both studies is that "we left about $30 mil. on the table. For the second year, the savings was $35 mil. on the value-added programs and they said it was worth $65 mil. to the companies."

"That is why there is some movement in the legislature to say, 'Don't do this. We didn't get as good a deal as we could have gotten with supplemental rebates.'"

The companies did not reach their savings target for the first year of the program and paid Florida the difference; the second year has yet to be evaluated.

"In the first year all of them agreed right up front that they were not going to achieve those savings in the first year so they wrote a check, except for Pfizer, who had to wait until the end of the year to realize that they hadn't achieved the savings," Wells said.

"In the second year, those will be evaluated again," Wells said. "They either prove that they save the money or write another check."

Bristol-Myers Squibb is guaranteeing savings of $16.3 mil. via community-based health management programs in exchange for formulary status for its key products (² Also see "Bristol Follows Pfizer Formula For Access To Florida Medicaid" - Pink Sheet, 10 September, 2001., p. 5). GlaxoSmithKline is funding medication error programs with guaranteed savings of $14.9 mil. in exchange for formulary status for some of its products (³ Also see "Florida Medicaid In The Spotlight: GSK Error Program Is Latest Experiment" - Pink Sheet, 3 February, 2003., p. 8).

Florida Disease Management Report: Programs Save 11%; Rebates Save More

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