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New law may shroud Pfizer deal

The drug giant obtains an inside track for the state's Medicaid business as similar deals get a measure of secrecy.

By ALISA ULFERTS

© St. Petersburg Times, published July 2, 2001


The drug giant obtains an inside track for the state's Medicaid business as similar deals get a measure of secrecy.

TALLAHASSEE -- Gov. Jeb Bush had a bleeding Medicaid budget and an eye for private industry innovation. Pharmaceutical giant Pfizer had an idea for cutting health care costs and helping patients manage their diseases.

Bush and company representatives met at a Republican governors' conference in Pasco County late last year.

Six months later, a deal with Pfizer was struck. It promised millions in savings to the state in exchange for giving Pfizer an inside track to lucrative Medicaid business.

State officials, accused by critics of crafting the deal behind closed doors, have said the negotiations were conducted in confidence, not in secret. Either way, the deal resulted in a new law, which took effect Sunday, that creates another exemption to Florida's public records law. It will keep documents about similar arrangements with drug companies from the public view.

Documents provided by the state last week about the Pfizer deal show an unusual effort to shield the deal from the public. The records, including e-mails, were released a month after the St. Petersburg Times requested them and after negotiations with Pfizer were substantially complete.

They also show that Bush personally urged a top state senator this spring to protect the Pfizer deal from critics in the Legislature.

"I spoke to (Sen.) Jim Horne tonight, and he is looking for information to stop the Senate's efforts to prohibit the Pfizer deal," Bush wrote to top aides on April 27.

"I told him one of you will get with him this weekend. Please let me know who is going to do this and what the outcome is," Bush continued.

Lawmakers passed the bill blessing drug company deals, plus the public records exemption they said they needed to get companies to negotiate.

But before the bill passed, state Medicaid director Bob Sharpe said his office had a "gentlemen's agreement" with Pfizer to alert the company when someone requested documents about the negotiations. That was to give them a chance to answer any questions, Sharpe said. Internal e-mails support that.

"Has Pfizer objected to producing the documents in response to the public records requests?" wrote Agency for Health Care Administration attorney Constantinos Miskis.

Sharpe's answer: "They asked that we tell the types of documents being produced before we release. I told them we would do this."

Sharpe said the state stressed to Pfizer that any records that didn't fall under a federal exemption were public in Florida. And Agency for Health Care Administration general counsel Julie Gallagher said the delay in releasing Pfizer's records was partly her personal schedule, which took her out of the office for several weeks.

But Pfizer wasn't the agency's only concern: Legal staff members at the agency wanted to know whether Bush knew of pending public records requests.

"Is the EOG (Executive Office of the Governor) aware of the potentially chilling effect that releasing the Pfizer documents may have on the willingness of other manufacturers to negotiate with us?" Miskis wrote. The answer, according to another e-mail, was yes.

Bill reflects deal

Florida's presidential ballot recount was in full swing when Bush attended the Republican Governors Association conference inNovember at the Saddlebrook resort in Pasco County. Bush ducked out of the media's question-and-answer period, but did speak to Pfizer president Hank McKinnell.

Florida's Medicaid program had a shortfall, later estimated at nearly $1-billion, and the two men apparently talked about what Pfizer could do to help.

Bush met again with Pfizer officials Feb. 2, a meeting left off the governor's daily schedule, a public record that is e-mailed to the media.

Bush spokeswoman Katie Baur said that was inadvertent.

"We wouldn't have cared if that was on the schedule," Baur said.

Campaign finance records show Pfizer has given at least $40,000 to the Republican Governors Association in the last few years. The company has given hundreds of thousands more at other Republican fundraisers and considerably less at Democrats' functions.

But Baur said that politics played no role in Bush's decision to pursue an arrangement with the drug company. Bush is often approached in public by people who want to discuss state business, Baur said.

"This (the Republican governors' meeting) would be a perfect opportunity for an individual who wanted to do business with the state to approach the governor," Baur said.

"That it happened at the (governors' meeting) was mere coincidence," she added.

Not long after the February meeting, state lawmakers began working on a bill to authorize the kind of deal the state was already hammering out with Pfizer.

The bill, which Bush later signed into law, allows the state to set up a preferred drug list for Medicaid patients. It also allows the state to enter into contracts with drug companies to provide certain services in lieu of giving the state discounts on drugs included on the list.

In the case of Pfizer, the state will let the company offer disease management programs and free Pfizer drugs to patients at hospitals and clinics at 40 Florida sites.

In exchange, Pfizer gets 23 drugs on the preferred list but is not required to offer the state the steep discounts that guarantee consideration for that list. The company will put up cash if its programs do not reach the target savings of $15-million the first year, $18-million the second year.

State and Pfizer officials estimate that 12,000 high-risk Medicaid patients will be taught how to better manage their diabetes, hypertension, congestive heart failure and asthma to avoid unnecessary and expensive emergency room visits. In all, up to 50,000 patients are expected to cycle through the program, which Pfizer will finance and AHCA will coordinate with the participating hospitals.

"We see this as an opportunity to take about 150 years of health care experience" and put some of that back in patients' hands, said Nancy Steele, a vice president for Pfizer Health Solutions. Although Pfizer didn't want records of the negotiations released while talks were ongoing, Steele said it was always the company's intent to publicize the program.

"Ironically, Pfizer is very interested in letting people know what we do. We do good work," Steele said.

The deal also involves a health literacy program, in which some Medicaid patients receive free Pfizer drugs from designated clinics, plus counseling on how to take them. According to Steele, the program is aimed at patients who can't read drug labels or may be unaware that they can help their children's asthma by buying special bedding and avoiding pet hair.

The state and Pfizer say they are proud of the program they have created and have high hopes for its success. But the public may never know for sure.

Although the agreement calls for a third-party contractor to review the program and determine the program's success and savings, that won't help the public if those records are exempt, said attorney Jon Kaney.

"There's a public policy problem," said Kaney, a board member of the First Amendment Foundation, an open-government advocacy group. Kaney said the deal leaves out the public, who won't know whether the state got the best price.

"This is the antithesis of the policy that allows us to have competitive bidding," Kaney said. "It's secret bidding."

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