Nurseweek/Healthweek|Deal would pay HMO to favor some medications

Deal would pay HMO to favor some medications

Posted 10-5-98

Foundation Health Systems Inc. is negotiating with Bristol-Myers Squibb Co. to use only the company’s drugs for certain illnesses in exchange for large rebates, according to an internal company document.

Any contract between a drug manufacturer and a hospital system is based on such considerations as performance, quality, and pricing, which can include rebates, said Jeff McCombs, PhD, a health economist at the University of Southern California School of Pharmacy.

"Is it good or bad? Not necessarily," McCombs said. "It’s situational and depends on the parameters—the drug classes and choices. If this deal offered enrollees only one anti-depressant drug, and it is one with low effectiveness, I would argue it is not good."

Foundation’s Sacramento-based Health Net is California’s third-largest HMO, with 2.1 million enrollees. A Health Net spokesperson, declined to comment on the proposal.

Details of the plan were first published in the San Francisco Chronicle after the newspaper obtained a copy of the company’s draft agreement. It calls for Bristol-Myers Squibb to pay $1 million per month for up to three years to Integrated Pharmaceutical Services, Foundation’s pharmacy benefits management subsidiary.

The Bristol-Myers Squibb drugs covered in the plan are the cholesterol-lowering Pravachol (pravastatin sodium), the blood pressure drugs Monopril (fosinopril sodium) and Avapro (irbesartan), the antibiotic Cefzil (cefprozil), and blood-clot inhibitor Plavix (clopidogrel).