NCPA - National Center for Policy Analysis

Drug Companies Manage Medicaid Cases in Florida

April 24, 2003

A growing number of pharmaceutical companies are helping to manage care for the sickest poor patients in some states. Under agreements with state Medicaid programs, the drug companies create guidelines for treating patients with chronic conditions like asthma and diabetes, and pay for case workers to help patients follow the guidelines.

The drug companies say the programs save taxpayers millions of dollars by keeping Medicaid patients out of the hospital. Florida, Arkansas and Colorado have such programs, and the drug companies say they are talking to officials in other states.

  • Pfizer says it has saved Florida $15 million in the first year, and Bob Sharpe, director of Florida's Medicaid program, said he is negotiating to extend the programs another year.
  • Critics, however, say the program is a tactic to avoid requirements in Florida and 24 other states that drug makers give the state greater discounts or have their medicines excluded from lists of preferred drugs for Medicaid patients.
  • More than 25 states have created such lists to try to rein in Medicaid drug costs.
  • Analysts for the Florida state legislature claim the state could save $64 million next year by ending the drug-company program and seeking greater discounts instead.

The analysts say that in medicine categories where manufacturers were forced to provide greater discounts, the cost of medicines purchased had fallen more than 20 percent.

By offering the disease management programs, Pfizer got all its products included on Florida's preferred drug list. Since the program started in June 2001, Pfizer has received a greater share of the more than $1.5 billion that Florida spends on Medicaid drugs each year.

Last year, the state's Medicaid program bought $122.4 million of Pfizer products -- a 22.6 percent increase versus a 14.5 percent rise in Florida's Medicaid over all drug spending.

Source: Melody Petersen, "Drug Makers Expand Their Medicaid Role," New York Times, April 23, 2003.


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