Discounts would become the only way companies can get on the Medicaid preferred list.
By JONI JAMES
Published April 25, 2004
TALLAHASSEE - Three years after Gov. Jeb Bush masterminded a trend-setting deal with drug manufacturers to try to rein in the state's spiraling Medicaid costs, Florida lawmakers want to ban its most controversial aspect.
Tucked into a catch-all House health care bill (HB 1843) poised for Senate passage is language that would significantly alter a preferred-drug-list plan that Bush quietly shepherded through the 2001 legislative session.
Under the present system, if pharmaceutical companies want their drugs on the preferred list for Medicaid, they generally have to give a steep discount. If doctors want to prescribe a medicine not on the list for a Medicaid patient, they need prior state approval.
But companies have a way around discounts. They may pick up the tab for other health programs to prevent or improve management of Medicaid patients' diseases. They guarantee the preventive programs save at least as much money as drug discounts.
A short sentence in the bill would outlaw that option.
"We want to decouple disease-management programs from the pricing of drugs," Sen. Durell "Doc" Peaden, the Senate's health care budget leader, said Saturday.
"If we find we want to do that, we can buy some of those services back, but we're just not sure how much money they've really saved," the Pensacola Republican said.
Legislative auditors have repeatedly questioned the cost-saving calculations of such "disease management" programs.
But Bush and the state Agency for Health Care Administration have called those analyses "flawed" and said one such deal with Pfizer saved the state $15-million in Medicaid costs last year.
If approved, the change would mark a rare defeat for Bush, who in six years has never seen the Republican-led Legislature attempt to override a veto or undermine a major initiative he's already gotten approved.
What's more, the defeat would be noticed nationally. Bush was among the nation's first governors to push through a preferred-drug-list program in hopes of slowing rising Medicaid costs.
For drug companies leery of dropping their prices in Florida, for fear they'd be forced to do so with other states, Bush's optional disease-management scheme was attractive. The option allows them to still be a player in Florida's Medicaid market, the nation's third-largest.
Bush's spokeswoman Jill Bratina said Saturday the governor will continue this week, the last of the regular 2004 legislative session, to try to change lawmakers' minds.
"It's of great importance to the governor," Bratina said. "This is an innovative program that has had the dual impact of providing lower drug costs and preventive health care."
Besides closing the option of offering a disease management program, the same House bill would increase the mandatory rebate for inclusion on the preferred list.
Drug companies would have to provide at least a 12 percent discount on top of the 15 percent rebate already required by federal law. Current law demands an additional 10 percent discount.
Peaden said Saturday that proposed changes, effective July 1, should not affect the current disease-management contracts the state has with four drug manufacturers. They just could not be renewed, he said.
Besides Pfizer's $15-million contract, three other companies have contracts with the state in lieu of some or all drug discounts: Bristol-Myers Squibb has promised to save the state $9.7-million annually; GlaxoSmithKline, $8.1-million; and AstraZeneca, $353,125.
