Dec 02 (Reuters Health) - Florida's Medicaid chief says a disease management pilot program with Pfizer Inc appears to be working for the state as well as the New York-based drug manufacturer.

However, across the nation such pharmaceutical-funded disease management programs have sparked lively debate among policymakers and consumer advocates.

Nearly 18 months into the 2-year program, Florida's Agency for Health Care Administration, which administers the state's $10 billion Medicaid program, says the program is saving the state "millions," according to Bob Sharpe, Florida's Medicaid director.

Pfizer's share of Florida's Medicaid market has increased, too, he said. The state agreed to include the company's products on its preferred drug list in exchange for Pfizer's guarantee of $33 million in savings over the 2-year term of the pact.

"It's working for both of us, and that was the hypothesis going in," Sharpe told Reuters Health.

And while the data is still preliminary, a Pfizer executive says Medicaid patients enrolled in the program are benefiting, too.

Financially strapped Medicaid programs across the country are struggling to find ways to contain rising prescription drug spending. In Florida, a looming budget deficit for fiscal 2002 prompted an aggressive response.

In May of last year, lawmakers in the Sunshine State approved a program to create a preferred drug list and negotiate further price breaks from drug manufacturers. To have their products placed on the drug list, companies had to agree to extend an additional 10% discount on top of federally mandated rebates.

Pfizer, through talks with state Medicaid officials, managed to carve out an exception. Lawmakers amended the rebate law to allow drugmakers to opt out if they provide the state with other healthcare services, such as disease management and health education. And Pfizer gets all its products listed on the state formulary without limits forcing doctors to seek special permission.

Pfizer says cost-cutting measures fail to address the cause of rising healthcare costs. "We need to address the underlying health issue of the population," said John Sory, vice president of Pfizer Health Solutions. "Us paying more money doesn't help solve that problem."

Under a pact announced last June, Pfizer has guaranteed that its disease management programs will save the state $15 million in the first year and $18 million in the second.

Pfizer funding pays for about 60 "care managers"--including registered nurses and respiratory therapists--who work with 11,000 high-risk Medicaid patients with asthma, diabetes, heart disease or high blood pressure at 10 safety-net hospitals across the state. A separate call-in center provides triage on nights and weekends and eventually will serve another 38,000 patients who live outside the hospitals' catchment areas, Sharpe said.

The goal is to give patients the tools and education they need to manage their own care. People who need the most help are getting the most, Sory said. Someone with chronic hypertension, for example, might receive a blood pressure cuff and a home care visit to learn how to use it.

In the months since the program's inception, there have been some significant improvements, Sory notes. Forty-five percent of patients have improved their blood pressure scores, he said. Thirty-nine percent of bedridden congestive heart failure patients have shown improvement over of the course of the program. And about 50% of asthma patients now use their peak-flow monitors at home, versus 25% at the program's launch.

The pharmaceutical-funded disease management approach has sparked debate among policymakers and consumer advocates.

Arkansas Medicaid Director Ray Hanley, who chairs a national group of state Medicaid pharmacy officials, is keen on the idea. His state has entered a diabetes management pact with Eli Lilly & Co. and is having discussions with other companies about similar arrangements.

But critics question whether Florida's pact or similar agreements will really save money or serve patients well.

"In my view this is not a policy decision that one would make. It's a political decision," cautioned Cheryl Rivers, executive director of the National Legislative Association on Prescription Drug Prices. "We don't view them as a major force in improving quality or saving money," she said.

Rivers represents a group of state legislators who will vote next month on a proposal to create the nation's first not-for-profit pharmacy benefits manager. The plan would involve establishing an "evidence-based" list of preferred drugs.

Promising to put a company's drugs on the preferred list in exchange for investment in a disease management program flouts the notion of developing a list based on a drug's clinical merits, she said. It also "undermines your ability to get other people to give you discounts," she said.

Amanda McCloskey, director of health policy for Families USA, said states are doing "whatever they have to do to leverage...savings and lower prices from the drug manufacturers." In Florida, it has resulted in the creation of a preferred drug list that includes all Pfizer products but excludes some competing products. She said the key is having the right protections in place to ensure access to needed medications. "If they're getting savings, great, but if people are suffering as a result, then that's a problem."

Pfizer agrees wholeheartedly. "We disagree with the entire idea of a preferred drug list. We would prefer that they do away with this idea of restricting access to medications completely," Sory said. And that's where disease management comes in.

Although formal talks have ye o begin, both Pfizer and Florida already express interest in extending the agreement. "We're very positive about the program and I don't see any reason why we woudn't continue," Sharpe noted.