QMed Inc. says it will drop special needs plans it has set up for Medicare beneficiaries in New Jersey.

QMed, Eatontown, N.J., a company that has developed disease management programs and pilot project health plans aimed at Medicare and Medicaid beneficiaries with health problems, says it will work with federal officials and New Jersey officials to wind down the operations of the New Jersey special needs plans in an orderly fashion.

During the third quarter, the QMed special needs plan in New Jersey was providing health coverage for about 290 Medicare beneficiaries with diabetes, cardiovascular disease or a history of stroke, the company reported earlier this year.

QMed also has been providing special needs plan coverage for more than 3,000 Medicare beneficiaries in South Dakota.

QMed increased third-quarter revenue to about $11 million, up from $2.2 million for the third quarter of 2006.

The startup company announced in November that it has been unable to find the capital it needs to support its growth.

Because of the inability to raise capital, QMed has laid off about 60 of its 90 employees, hired investment bankers to explore “strategic alternatives” for the company, warned that it is exploring the possibility of seeking bankruptcy court protection, and started a process of focusing its efforts on the disease management business and government demonstration projects, the company says.

In addition to shutting down the special needs plan operations in New Jersey, QMed “will be limiting or disengaging from special needs plan related activity in South Dakota,” the company says.