NORPLANT GAINS MEDICAID COVERAGE IN 13 STATES BUT CALIFORNIA BALKS

Executive Summary

NORPLANT GAINS MEDICAID COVERAGE IN 13 STATES BUT CALIFORNIA BALKS at the $ 350 per patient price-tag for the product. California Health Commissioner Kenneth Kizer, MD, wrote to Wyeth- Ayerst President Fred Hassan Jan. 31 suggesting that the price is too high and may lead the state's Medicaid agency, Medi-Cal, to look less favorably on coverage for future Wyeth-Ayerst products. Medi-Cal also wrote to the HHS Inspector General's Office asking it to examine Norplant pricing to Medicaid. Medi-Cal is citing lower prices abroad for the product and noting that while Norplant is being marketed in the U.S. by Wyeth, it was developed by the Population Council ("The Pink Sheet" Dec. 17, T&G-3). Wyeth-Ayerst responded in writing to Medi-Cal in early March. The firm's letter makes several points: the product is safe and effective; is more effective than intrauterine devices and other barrier contraceptive methods; eliminates problems with patient drug regimen compliance, as is sometimes seen with oral contraceptives; and is cost-effective, providing five years of contraceptive protection. The company also noted that its price includes the costs of teaching physicians how to implant and remove the product. Wyeth- Ayerst aims to provide training to about 8,000 physicians by June, at a cost of about $ 1,000 each. Physician education and patient counseling are considered key factors in a successful launch of the product. Two large Medicaid programs, New York and Pennsylvania, are among the 13 that have already approved coverage. The others are Michigan, Alaska, Utah, Nebraska, Maryland, Montana, New Hampshire, North Dakota, South Dakota, Wyoming and Delaware. The company received a boost from a March 20 New York Times editorial asserting that it is "imperative" for Medicaid to cover the product. "One consequence" of the lack of access to or knowledge of effective contraceptive options among poorer women, the editorial maintains, is that "the abortion rate for women who are covered by Medicaid is three times that of women who are not." The $ 350 Norplant System and Resources Kit includes six implantable rods containing 36 mg levonorgestrel, Wyeth's trocar device for implanting the rods and other surgical equipment related to Norplant, and training materials ("The Pink Sheet" Feb. 11, In Brief). The price to Medicaid would actually be somewhat less, since the Medicaid price discount law requires companies with products covered by Medicaid to provide a minimum discount of 12.5% during 1991.