Florida Officials Finalize Medicaid Formulary After Drug Makers Offer Discounts

Florida officials have put together a "preliminary list" of more than 1,300 prescription drugs that will be placed on the formulary for the state's Medicaid program under a new law requiring drug makers to "offer steep discounts for medicines they want considered for the roster," the Wall Street Journal reports. The state informed drug companies that in order for their products to be considered for the formulary, they would have to offer rebates totaling in "excess of 25% of the drug's price established in a master list compiled by federal health officials," a figure 6% greater than the average rebate the state currently receives under federal law. And although lowering the price of a drug increased the chances of inclusion, the Journal reports that a "panel of drug experts" also considered "medical factors" in creating the formulary. Under the new program, slated to take effect in late July or early August, doctors serving Medicaid beneficiaries either will have to prescribe drugs found on the formulary or seek prior approval from the state for non-formulary drugs. Some categories of drugs, however, such as HIV/AIDS treatments, will be excluded from the prior approval requirement. The Florida law also gives drug companies the option of providing Medicaid services -- in place of discounts -- for inclusion on the formulary; last week, for example, the state signed a disease management agreement with Pfizer to provide care for chronically ill patients, with the company promising savings of $33 million over two years. Both the Pfizer deal and the formulary list will be presented to a state advisory committee on June 26 for approval. The new program is expected to save the state $214 million in Medicaid expenses in the fiscal year beginning July 1, and the Journal reports that "[o]ther states ... are expected to follow Florida's lead" (Hensley et al, Wall Street Journal, 6/25).