Audit: Bidding on drugs could save millions

TALLAHASSEE -- Requiring drugmakers to give rebates as a condition of having their products used in the state's Medicaid program has saved Florida more than $80-million. But more could be saved if pharmacy networks had to bid for the Medicaid business, an audit concluded.

Medicaid pays for health care for many of Florida's poor, elderly and disabled. Because of a 2001 law that created a list of preferred drugs for Medicaid patients, Florida is considered a leader in requiring drugmakers to cut prices.

If pharmaceutical companies want their drugs on the list, they generally have to give a discount.

The preferred drug list saved Florida $81-million in 2001 and 2002, according to the audit released this week by Legislature's Office of Program Policy Analysis and Government Accountability.

The program, which has survived a legal challenge by drug companies, is considered a novel way to help control one of the state's biggest and fastest-growing costs. Medicaid spending, especially for prescription medications, eats up a huge piece of the state budget pie: the second-largest part after education. Since 1999, its cost has increased 13 percent a year to nearly $11.4-billion.

Florida could save another $22.4-million this year alone if it were to accept a recommendation the auditing agency made in 2001, the audit said.

If the Agency for Health Care Administration, which oversees Medicaid, were to require bids to choose networks of pharmacies that Medicaid recipients would have to use, it could negotiate even further discounts, the audit report said.

Lawmakers considered that in 2001, but retail pharmacies, particularly independent pharmacies, opposed any limit of the network of drug retailers that can participate in Medicaid.

Normally, any pharmacy meeting basic qualifications that agrees to accept payment at preset rates is allowed to participate in the Medicaid program.

In response to the audit, agency Secretary Rhonda Medows wrote the agency hadn't gone to competitive bidding for pharmacy services because such proposals "have failed to gain legislative support through the appropriations process."

Medows said the agency was looking into requirements for such a process should lawmakers approve it.

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