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Final Court Report
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Program Year 1 Report

DDP Program Year 1 Report

Completion of DDP Program Year 1.

Our December 2000 report to the court covered the first nine months of operation for the DDP, which included information from the first two DDP Order Periods. With information from the third and final DDP Program Year 1 order period, we can now provide a summary of the value (computed at Wholesale Acquisition Cost prices) of all products shipped as a result of the DDP during the DDP Program Year 1 (April 1, 2000-March 31, 2001). Program Year 1 (PY 1) had three order request periods, each two weeks long, in which DDP participants could request products from participating companies. The final PY 1 order request period ended January 22, 2001; requests adjusted into actual orders were sent to the companies before the middle of February.

Total Amount of Liability Expended.

The attached spreadsheet lists all of the settling defendant/DDP participant companies, their total and annualized dollar figure liability set forth in the Settlement, and the dollar value of products actually ordered and shipped during DDP Program Year 1 (PY 1). A total of $39,980,749.75 of products was ordered and shipped during PY 1. As noted in that document, we provide this information based on our own figures, verified whenever possible with the DDP participating companies. The shortfall between the total value of products shipped and the total PY 1 liability amounts to $9,384,343.58. For companies with a shortfall, this amount has been rolled over to PY 2 and added on to the annualized amount, resulting in a total of $58,749,436.92 liability available to the DDP during PY 2.

Variation Across Companies in Amount of Unspent Liabilities.

The approximately $9.4 million of unspent liability is not distributed evenly across all DDP participating companies. The attached bar graph shows the wide variation across companies in their amount of unspent liabilities. The companies whose products were most popular with DDP Participants and whose Year I liability was quickly spent (even sometimes, with permission of those companies, spent beyond the amount required by the Settlement) are Eli Lilly, Glaxo Wellcome, Warner Lambert, and Zeneca. By contrast, the products made available to the DDP by some of the other Participating Companies appeared to be much less attractive to DDP Participants. AHP, Dupont, Bristol- Myers Squibb, and Abbott are companies with the largest unspent liabilities from PY 1.

Efforts to Effectively Spend All Companies' Liabilities.

The December 29, 2000 Year-End Report on the DDP showed that pharmaceutical companies whose DDP Year 1 liability was already spent were also those that had made available to the DDP many or all of their drugs also appearing on the list of "Top 200 Drugs" in the U.S. for 1999. Conversely, pharmaceutical companies with the largest unspent DDP liabilities had one or more products among the top 200 U.S. drugs that were NOT made available to the DDP, or had restrictions on the availability of their drugs. In the months following release of the December 2000 report, some of the companies that had unspent PY 1 liabilities or that had discontinued drugs previously available through the DDP entered into discussions on adding more valuable products. Companies who recently offered to make additional drugs available to the DDP starting the first order period of PY 2 are: American Home Products (Protonix), Bristol-Myers (Pravachol, Tequin), Glaxo Wellcome (Advair, Relenza, Tezivir), Pfizer (Geodon, Glucotrol XL). Pfizer has also improved the DDP's flexibility by removing minimum amounts from the drugs they offer.

Outlook for PY 2.

As the DDP enters its second year of operation, we have a net gain of approximately 50 indigent care clinics and hospitals eligible to place orders, compared to the beginning of PY 1 (see attached list). In addition, we have almost 50% more dollar value of products available for PY 2 (due to liability rollovers) than was spent in the first DDP Program Year. There has been little net change in the number of pharmaceutical products available through the DDP, due to the conflicting effects of some discontinued products and some added products. However, the overall value of the products is starting to improve due to the confirmed addition of some valuable drugs (as indicated above) plus ongoing discussion about other possible additions. The order requests placed during the initial DDP Order Period (April 23-May 7, 2001) for Program Year 2 should indicate whether or not the additional drugs offered are sufficiently valuable to spend out the outstanding DDP liability for American Home Products and other companies with significant PY 1 unspent liabilities.

We will continue our efforts to provide high quality, cost-effective DDP administration to the participating clinics, hospitals, and pharmaceutical companies. At the same time, we are expanding our efforts to build on the DDP's beneficial impact by providing a range of technical assistance to indigent care providers seeking to improve cost-effectiveness of their pharmaceutical care. The Pharmaceuticals and Indigent Care Program has received funding from The California Endowment and The California HealthCare Foundation for expanded technical assistance activities plus development and dissemination of materials on selection and purchase of appropriate pharmaceuticals. We look forward to our expanded presence-both within California and beyond state borders-as a participant in the ongoing discussion about improving access to medications by low-income people.

Report submitted by:

Kathryn Saenz Duke, JD, MPH
Medpin Program Director
Leon Wilde, RPh
Medpin Program Pharmaceuticals
Liz Maslin, MA
Medpin Program Administrator
Marice Ashe, JD, MPH
Director, Public Health Trust

Program Year 3 Report »

Program Year 2 Report »

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