States looking to save money on Medicaid can are grappling with a solution proposed by Eli Lilly, whose Zyprexa schizophrenia drug is frequently the biggest cost to these programs. The drugmaker will monitor ’sloppy prescribing’ by docs - but only if a state agrees to let docs prescribe Zyprexa without first seeking permission from the state.

Balk and Lilly cuts you loose. Medicaid officials in Wisconsin found that out last year, after trying to cut $22 million annual state spending on Zyprexa by requiring docs to get permission before prescribing it. Lilly responded by ending the program. In at least four other states, officials say Lilly dangled the program to keep them from restricting Zyprexa use.

The program has also been offered in lieu of rebates that companies often pay to states that place their drugs on preferred lists. “I didn’t like that commingling of service and rebates,” says Jim Hardy, a former Pennsylvania deputy secretary for medical assistance. “I want to manage the benefit, and I want to get the best rebate deal I can. I don’t want to settle for half a loaf.

Some states, such as Michigan, praised the program, but Wisconsin said ‘no thanks,’ and saved $4 million last year by restricting Zyprexa.

Comprehensive NeuroScience (consulting firm that helps Lilly manage programs)

Source: The New York Times (registration required)

[tags]Eli Lilly, Medicaid, Zyprexa[/tags]