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Executive Summary

Utah's state Medicaid agency reportedly has accepted Merck's legislative proposal to obtain prescription drug price discounts in exchange for open access to Merck products. Arkansas, which like Utah has an open formulary, already has accepted Merck's proposal ("The Pink Sheet" May 7, p. 3). In addition, the company says that Delaware and South Carolina "seem certain" to accept the offer. Utah accepted the proposal under two conditions, which were agreed to by Merck. The state did not want to sign a contract that bound its Medicaid agency to keeping an open formulary for all Merck products in perpetuity. The state also wanted to maintain a prior approval constraint on Pepcid prescriptions; Utah was concerned that physicians may order therapeutic doses for patients who need only maintenance doses. Merck reportedly accepted the dosing constraint because it is not more restrictive than the FDA-approved label recommendation. Merck Sharp & Dohme President John Zabriskie told "The Pink Sheet" that although the company is "still in discussion" with most states," it is "hopeful that as many as 40 states" will accept the proposal by mid-summer. About 25 of those states currently have open formularies. Merck is particularly interested in having its offer accepted by those with restrictive formularies. About 13 states have formularies that are closed to Merck products, Zabriskie said. Another 12 restrict access to at least one Merck product -- for example, by requiring prior authorization. Of those 12, he added, at least six have indicated "strong interest" in the legislative proposal. Zabriskie contrasted Merck's proposal from the Medicaid bill sponsored by Sen. Pryor (D-Ark.). The Senate bill (S 2605) would "limit access" of Medicaid patients to prescription drugs, whereas the Merck proposal would "guarantee access." He maintained that, "socially and medically, government should be encouraging full access" to pharmaceuticals.

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