Drugmakers want to provide health programs instead of cheaper medicine. For now, Florida will let them.
MIAMI - James Johnson, a former country musician from West Hollywood, struggles daily with complications from emphysema, diabetes and congestive heart failure. He has his good days and bad days.
Since participating in a novel program run by a pharmaceutical company, which instructed him in managing his condition, he spends less time at the hospital and less time in bed.
"I don't have as many bad days as I did before," he said.
Johnson, 54, learned from a Pfizer Inc. health manager how to control his blood sugar and follows a strict regimen, including diet and exercise.
Florida has become the testing ground for disease management programs sponsored by drugmakers, who say they will slash Medicaid costs while improving patient health. New York, Texas and other states are considering similar programs.
Pharmaceutical companies offer the programs as an alternative to the drug price discounts that more than a dozen states demand from them. Critics say the programs do help, but that discount prices do more to drive down health costs. They say programs may actually increase drug company sales and make Medicaid costs rise further. Drug companies say medical costs go down because patients spend less on doctor and hospital visits.
Johnson said he used to go to the hospital as often as 10 times a month, but now may make three visits.
He also spends less on drugs: His prescriptions used to cost from $100 to $200 a month, and now total $50 to $75.
Florida recently decided to renew its four drug company-sponsored programs - run by Pfizer, Bristol-Myers Squibb Co., GlaxoSmithKline PLC and AstraZeneca PLC - when they expire June 30.
Bob Sharpe, director of Florida's Medicaid program, said a discount saves the state money in the short term, but "does nothing in investing in people."
Drugmakers and Florida officials say the programs, by improving health, will have saved almost $65-million in Medicaid costs over two years ending June 30.
But the Florida Legislature's policy review office said the state could save $64-million the next fiscal year alone by eliminating the programs and forcing companies to offer drug discounts for Medicaid's poor, elderly and disabled recipients.
None of the four companies sponsoring programs in Florida have calculated the state's actual savings from disease management. Pfizer expects an independent auditor to complete a report on savings from its program later this month. Its program began in July 2001 and is the biggest, with about 60 care managers working with 13,000 Medicaid recipients.
The companies guarantee total savings to Florida of $64.7-million over two years or they'll pay the difference. Pfizer guarantees $33-million in savings.
Pfizer's deal with the state lets the company sell drugs at full price to Medicaid patients. Pfizer's Medicaid drug sales in Florida rose about 22 percent to $142.2-million in 2002, company spokesman Nehl Horton said, compared with a 14 percent increase in overall state Medicaid drug spending.
Companies that run the programs are less inclined to keep prices in line with competitors, the Legislature's Office of Program Policy Analysis and Government Accountability said in April.