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SANDOZ' CLOZARIL REIMBURSEMENT BY MEDI-CAL MAY BE DENIED

Executive Summary

SANDOZ' CLOZARIL REIMBURSEMENT BY MEDI-CAL MAY BE DENIED following an April 4 recommendation by California's Medical Therapeutics and Drug Advisory Committee not to reimburse for the antischizophrenic drug. At a public meeting to consider formulary petitions, the advisory panel voted five-to-three not to recommend approval, suggesting that the drug should not be considered a "vital" treatment. A California statute stipulates that prescription drugs provided under Medi-Cal "shall not include any drug which because of...discriminatory refusal to sell by the manufacturer...is not available on the same terms and conditions to all providers," unless it is determined by the Department of Health Services director to be "vital to the program and no acceptable substitute is available." Such determinations must be based on a recommendation from the Medical Therapeutics and Drug Advisory Committee, comprised of four physicians and four pharmacists. The Medi-Cal Benefits Branch is working on an additional report to advise the department director, who is expected to decide the issue "fairly soon," perhaps within the month, a Medi-Cal spokesperson said. * The California Pharmacists Association recently petitioned the state's Department of Health Services to deny coverage of the drug under Medi-Cal. In the petition, the pharmacy association asserted that reimbursement for the drug would violate a state law that prohibits Medi-Cal coverage for non-vital drugs with restricted distribution provisions. Clozaril is dispensed through the Clozaril Patient Monitoring System (CPMS), which circumvents traditional distribution channels. At the April 4 committee meeting, CPhA VP-Professional Affairs Vic Boisseree testified: "There are substitute drug products available and, therefore, [Clozaril] is not vital to the program." The CPhA exec pointed out that alternative antipsychotic drugs for the treatment of schizophrenia are already on the state's formulary, including chlorpromazin, thioridazine, perphenazine, trifluoperazine, fluphenazine, thiothixene, haloperidol, lithium carbonate and lithium citrate. Non-formulary drugs, which require prior authorization for reimbursement, are molidone and loxapine. Furthermore, because of the high incidence of severe side effects, such as agranulocytosis, associated with the drug, Biosseree noted, the Clozaril literature suggests patients should try at least two different standard antipsychotic drugs before taking Clozaril. "The likelihood that all of these potent agents" on the Medi-Cal formulary and non-formulary list "would be ineffective is exceedingly slight," he said. According to Sandoz' monograph, Biosseree added, 90 drug products in 17 therapeutic categories can cause agranulocytosis. "The societally sanctioned roles of pharmacists and physicians in managing the potential occurrence of agranulocytosis with these products is being totally bypassed by using 'case managers' and phlebotomists," he said. The group also claims CPMS "is in violation of the 'freedom of choice' provisions of Title XIX of the Social Security Act in that it discriminates among eligible providers of a Medicaid-covered benefit." Sandoz Director of Scientific Communications Gilbert Honigfeld maintained before the state committee that Clozaril is a "breakthrough" treatment for schizophenic patients who are not successful on other therapies. Noting that Clozaril received a "1A" rating (major therapeutic advantage) from FDA, the Sandoz exec asserted that FDA would not have approved the high-risk drug unless it were a breakthrough therapy. The committee's decision hinged on the issue of what constitutes a "vital" drug under the statute. The committee determined that a drug had to be life-saving in order for a restrictively distributed drug to be reimbursed by Medi-Cal. Although Honigfeld argued that schizophrenia is a devastating mental illness that can lead to premature death due to suicide, neglect, and violence at the hands of others, the committee concluded Clozaril is not a "vital" therapy. He also pointed out the $4-6 bil. annual costs in the U.S. for schizophrenic patients, as well as $30-40 bil. a year in lost productivity. The Sandoz official estimated that roughly 9,000 patients in California would benefit from Clozaril, and the cost would be divided between public, private and Veterans Administration reimbursement programs.
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