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TENNESSEE MEDICAID REVOKING SIX-MONTH WAIT BEFORE NEW DRUGS

Executive Summary

TENNESSEE MEDICAID REVOKING SIX-MONTH WAIT BEFORE NEW DRUGS may be considered for the state formulary. Medicaid officials agreed in principle to lifting the wait period at an April 11 meeting with Pharmaceutical Manufacturers Association members. In addition, the agency said it would reconsider individual drugs excluded from or removed from the formulary, whenever specifically requested by drug firms or other groups. Previously, the state required its formulary advisory committee to defer review of a drug until six months after the product was cleared for marketing, with a fast track for certain categories such as AIDS drugs. Under one approach being considered, drugs would be taken up at the first committee meeting after FDA approval. The committee meets quarterly. Tennessee Medicaid set up a formulary in 1981. A program was later added to require prior approval when specific drugs on the formulary are provided -- most notably the psychotropic drugs Prozac, Buspar, and Wellbutrin, and all branded non-steroidal anti-inflammatory drugs. Although some modifications have been made, the state agency's authority to operate a formulary and prior approval program remains intact. Both PMA and a coalition of which it is a key member, "Tennesseans for Sensible Medicine," have sought to overturn the formulary/prior approval program entirely. Time has run out for this year on pending state legislation to ban the formulary: the 1990 legislative session ended April 12. An official of Tennesseans for Sensible Medicine also commented that the group would not push the legislation as long as the state showed "encouraging" progress in modifying the formulary. However, state officials contend that formulary opponents began promoting legislative change without pursuing administrative remedies. In addition to holding public forums to claim that the formulary impedes access to care ("The Pink Sheet" Jan. 29, T&G-2), Tennesseans for Sensible Medicine publicized a PMA-sponsored study suggesting that formulary may increase net Medicaid spending ("The Pink Sheet" Feb. 9, p. 11). The organization's members also include the Tennessee Academy of Family Physicians, Tennessee Association of Business, Arthritis Foundation, and Leukemia Society. While the coalition gained a hearing with Tennessee Governor Ned McWhirter (D), he indicated near the legislative session's end that he would oppose the legislation. State Medicaid officials strongly objected to any weakening of the formulary, contending the legislation would cost the state $40 mil. annually. The final state budget for this year is expected to cut the Medicaid drug budget by about 5%. The formulary committee's next meeting is May 23. On the agenda are Merck's Losec for gastroesophageal reflux conditions, Pfizer oral antifungal Diflucan, Ciba-Geigy's Anafranil for obsessive-compulsive disorders, Searle's beta-blocker Kerlone, and Syntex' Synarel, a nasally-delivered endometriosis treatment. The committee also will review anticonvulsant drugs. The federally-set maximum allowable charge (MAC) for anticonvulsants is based on generic drug prices. However, according to state officials, clinical problems were experienced by patients switching between generic products, and there were reports that some products had poor quality control or deteriorated if not stored properly. For about a year and a half, the state has been paying above the MAC so that patients can obtain the brandname product, Ciba-Geigy's Tegretol, with the penalty of foregoing the federal Medicaid match for this drug category. One approach under review would put a few generics back on the formulary but advise that patients stick with one drug once medical conditions are stabilized.
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