NCPA - National Center for Policy Analysis

Other States Eyeing Florida Drug And Health Care Arrangement

July 9, 2001

Florida has entered into a novel pact with Pfizer Inc. -- the world's largest pharmaceutical company -- which the state hopes will result in Medicaid savings. Other states and other drug makers are watching the deal closely.

  • Under the agreement, doctors who treat Medicaid patients can prescribe Pfizer medicines routinely and without hassle.
  • Pfizer persuaded Florida to let it maintain drug prices by promising to save the state money through an innovative but controversial set of preventive health-care services known as disease management.
  • Pfizer's competitors, by contrast, have to offer price rebates on each of their drugs to get on the state's new "formulary" of easily prescribed medicines.

Pfizer's deal in Florida brings the state some relief in health-care spending. Florida gets Pfizer to underwrite a trial of a new cost-saving approach, plus $33 million in Medicaid savings over two years through disease management. In addition, the state expects to save $199 million over a year through price concessions that other companies have made to get their medicines on the state's new Medicaid-drug formulary.

Source: Russell Gold, Scott Hensley and Joni James, "Pfizer Ducks Pressure on Prices in Helping State Save on Medicaid," Wall Street Journal, July 9, 2001.


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