COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Services Agency

DATE:

April 29,2002

BOARD MEETING DATE:

May 21, 2002

TO:

Honorable Board of Supervisors

FROM:

Margaret Taylor, Director of Health Services

Gale Bataille, Director of Mental Health Services

SUBJECT:

Amendment to the Agreement with Eli Lilly and Company

Recommendation

Adopt a resolution authorizing the President of the Board to amend an agreement with Eli Lilly and Company.

Background

Eli Lilly and Company manufactures Zyprexa, a psychiatric medication used by some Mental Health Services Division clients. Eli Lilly and Company and the Mental Health Services Division have an agreement dated November 16, 2001, and ratified by your Board on January 8, 2002 (#64998). This agreement provides for Eli Lilly and Company to give a rebate of a portion of the total cost of Zyprexa purchased by the Mental Health Services Division. The term of the original agreement was October 1, 2001, through September 30, 2002.

Discussion

The current agreement with Eli Lilly contains provisions for a 4% rebate on Zyprexa, a drug used to treat psychotic disorders. Eli Lilly and Company provide a rebate calculated on the total purchases of Zyprexa by the San Mateo County Health Services Agency. Eli Lilly has notified the Mental Health Services Division that effective April 1, 2002, the Zyprexa rebate will be increased to 6% of the Division's total purchases. The term of the agreement will be extended through March 31, 2003 .

Vision Alignment

This agreement with Eli Lilly and Company keeps the commitment to Ensure Basic Health and Safety for All and goal number 8: Help vulnerable people-the aged, disabled, mentally ill, at risk youth, and others- achieve a better quality of life. The agreement contributes to this commitment by providing psychiatric medications for vulnerable mentally ill clients.

Fiscal Impact

Rebates from this agreement will save the County a portion of the costs incurred by providing this medication for the treatment of Mental Health clients. The rebate at the current level of 4% is about $100,000 annually. The 6% rebate will amount to approximately $150,000 annually and will be included in the FY 2002-03 Mental Health budget. There is no net County cost.