COUNTY OF SAN MATEO

Inter-Departmental Correspondence

 

Health System

 

DATE:

May 13, 2009

BOARD MEETING DATE:

June 16, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

   

FROM:

Jean S. Fraser, Chief, Health System

 

Louise Rogers, Director, Behavioral Health and Recovery Services

   

SUBJECT:

Agreement with Eli Lilly and Company

 

RECOMMENDATION:

Adopt a Resolution authorizing the President of the Board to execute an Agreement with Eli Lilly and Company to provide pharmaceutical access rebates for the term July 1, 2009 through June 30, 2010.

 

VISION ALIGNMENT:

Commitment: To ensure basic health and safety for all.

Goal(s): Help vulnerable people – the aged, disabled, mentally ill, at-risk youth, and others─achieve a better quality of life.

 

This Agreement will contribute to this commitment and goal by decreasing the overall cost of pharmaceutical drugs purchased from Eli Lilly and Company (“Eli Lilly”).

 

Behavioral Health and Recovery Services (BHRS) provides a range of services to promote wellness and recovery and to support consumers at the lowest possible cost of care. The provision of pharmaceutical prescriptions secured at discounted rates supports clients receiving care at lower costs for services.

 
 
 
 
 
 
 

Performance Measure:

Measure

FY 2008-09
Estimate

FY 2009-10
Target

Contractor shall provide rebate payments within 90 days of receipt of rebate invoice

95%

95%

 
 

BACKGROUND:

Most pharmaceutical business in BHRS is handled through MedImpact, the Pharmacy Benefits Management (PBM) contractor. The MedImpact Agreement includes a provision for managing rebates from pharmaceutical companies, which is a common industry practice in California. The PBM charges an administrative fee for managing rebates.

 

Eli Lilly offers rebates for Zyprexa and Cymbalta, anti-psychotic therapeutic drugs they manufacture. They are willing to contract with the County directly. This is advantageous to the County because it saves in administrative fees charged by the PBM.

 

BHRS has contracted with Eli Lilly for these access rebates since 2002. BHRS has a current Agreement with this contractor that expires on June 30, 2009.

 

DISCUSSION:

Eli Lilly is offering to contract to provide a 10% access rebate on purchases of Zyprexa and an 8% rebate on purchases of Cymbalta calculated on the total purchases for BHRS clients, effective July 1, 2009 through June 30, 2010.

 

The Agreement has been reviewed and approved by County Counsel and Risk Management. The County Manager has approved a waiver of the Equal Benefits Ordinance requirements for this Agreement. This contractor provides benefits for domestic partners that are substantially the same as those provided for spouses, but the benefits are not equal. The contractor has assured compliance with the County’s Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, and non-discrimination.

 

FISCAL IMPACT:

Rebates from this Contractor are expected to save the County an anticipated $130,000 for the term of the Agreement. This total will be generated from rebates on purchases of Zyprexa and Cymbalta prescribed for BHRS clients. These funds will offset the cost of prescription drugs and are built into the BHRS FY 2009-10 Recommended budget for pharmaceuticals. There is no Agreement maximum. There is no Net County Cost associated with this Agreement.