After ‘Secret Negotiations’ Revealed, Florida Health Officials Revise Medicaid Deal with Pfizer

Florida state health officials on May 16 decided to "back off" key provisions of a deal in which Pfizer, Inc. would have provided the state's Agency for Health Care Administration with certain health care services in exchange for the automatic inclusion of Pfizer drugs on the state Medicaid formulary, after the "secret negotiations" between the two groups became public. According to the South Florida Sun-Sentinel, Pfizer, under a "confidential proposed agreement" with the Florida agency, had agreed to establish a program to manage the care of at least 12,000 Medicaid patients with chronic illnesses and to dole out free drugs at designated clinics in lieu of giving the state the $19 million drug rebate it is expected to owe the Medicare program next year. Such a rebate is stipulated in law, slated to take effect July 1, that requires drug companies to provide discounts in the form of cash rebates or other services. The legislation is expected to cost the state more than $200 million in Medicaid drug costs. In return for Pfizer's services, which were estimated to cost the state between $18 million to $20 million over the next year, AHCA would have guaranteed that 23 of Pfizer's drugs were "automatically" on the Medicaid formulary -- exempt from medical expert committee review. But state legislators said the proposal "circumvented the intent of the bill" by exempting Pfizer from the committee meant to review all drugs based on efficacy and cost. AHCA officials denied giving Pfizer "preferential treatment," noting that "initial discussions" had begun with five other drug makers. And Pfizer officials said they only intended to develop an "innovative" partnership with Florida. In light of the controversy, State Medicaid Chief Bob Sharpe said that some of the agreement terms of the Pfizer "deal" will be changed, including:

• To be included in the state Medicaid formulary, the 23 Pfizer drugs in question would have to be approved by the medical expert committee, However, the AHCA would recommend that the committee, which has yet to be named, endorse Pfizer drugs.
• The terms of the agreement would be limited to one year, effective Oct. 1. The original deal was slated to last two years, beginning July 1.
• All new Pfizer drugs would receive medical committee approval prior to being placed on the Medicaid formulary. The previous agreement would have guaranteed automatic inclusion in the formulary for all new Pfizer drugs (Kestin/Schulte, South Florida Sun-Sentinel, 5/17).