HHS Approves Florida Medicaid Drug Formulary
HHS Secretary Tommy Thompson on Sept. 18 approved a Florida Medicaid plan that creates a formulary of "preferred" prescription drugs, the South Florida Sun-Sentinel reports. Under the plan, doctors must receive prior approval before prescribing non-formulary drugs to Medicaid beneficiaries. According to Florida Medicaid Director Bob Sharpe, drug companies that want their products included in the formulary must agree to provide the state with rebates -- either via "supplemental cash rebates" or by providing programs, such as disease management services and health education -- in addition to the Medicaid discounts required by federal law. Firms choosing to provide health programs in lieu of cash must show a savings estimate of at least $16 million, or pay the difference in cash (McVicar, South Florida Sun-Sentinel, 9/19). The new program is expected to cut the state's Medicaid drug expenses by 15%. This year, the state spent $1.7 billion of its $10 billion Medicaid budget on prescriptions.
Advocate, Industry Concerns
The New York Times reports that drug makers included in the formulary have a "big advantage," as sales of preferred drugs are "likely to increase sharply." Pfizer and Bristol-Myers Squibb already have signed agreements with the state to participate in the plan. However, advocates for Medicaid beneficiaries are concerned that the plan could "deprive" patients of needed medication by discouraging physicians from prescribing drugs not on the preferred list. "If a person has a doctor willing to go through the prior authorization process, the patient can get whatever drug the doctor prescribes. But the procedures are confusing, time-consuming and onerous," Miriam Harmatz, a lawyer at Florida Legal Services, said, adding, "Many doctors will end up prescribing only those [drugs] on the formulary." And Jan Faiks, assistant general counsel for the Pharmaceutical Research and Manufacturers of America, said that Florida's plan violates federal law by requiring manufacturers to provide discounts "beyond those required by federal law as a condition of being included on a state's formulary." PhRMA has filed a lawsuit to block the Florida program, and may amend the suit to challenge HHS' approval of the plan, according to Faiks (Pear, New York Times, 9/19).
Medicare Discount Requirement
In related news, Thompson also approved a separate Medicaid plan for Florida that requires pharmacies in the Medicaid program to give price discounts to Medicare patients. HHS' approval gave the state permission to remove from the Medicaid program pharmacies that do not comply with the price discounts. The Florida Pharmacy Association said that the law, called the Prescription Affordability Act, will create a "hardship" and may drive some pharmacies out of business (South Florida Sun-Sentinel, 9/19).
