Michigan Releases Medicaid Drug Formulary, Amid Objections from Drug Companies

Despite a lawsuit filed last month by the Pharmaceutical Research and Manufacturers of America to prevent Michigan from issuing a Medicaid prescription drug formulary, the Michigan Department of Community Health last week released the preferred drug list as part of an "unprecedented effort to cut costs," the AP/Detroit News reports. The department currently spends about $1 billion per year on drugs for Medicaid beneficiaries and other residents in state health programs (Durbin, AP/Detroit News, 12/8). The formulary, projected to save the state at least $42 million, organizes medicines into therapeutic categories. A small group of pharmacists and doctors appointed by the state chose a few "best in class" drugs in each category to form the preferred list. The state also asked drug companies to lower their prices to match the lowest "best in class" price for any drug not selected for the formulary (Kaiser Daily Health Policy Report, 12/3). After the list takes effect Jan. 14, doctors can only prescribe Medicaid beneficiaries medications from the list. If a doctor wants to prescribe a drug not on the list, he or she will need to "call a state technician and get approval," which will be granted only if the drug is considered "medically necessary."

Objections
PhRMA maintains that the state is "overstepping its authority" by implementing the formulary, the AP/News reports. Jan Faiks, PhRMA's assistant general counsel, said, "The bottom line is that the Michigan program, with its prior authorization provision, would limit patient access to needed medications. PhRMA believes patient access to medicines should be expanded, not restricted." The formulary does not include several "well-known drugs," such as Ritalin, Vioxx, Celebrex and prescription Tylenol. But Geralyn Lasher, a spokesperson for the state Department of Community Health, said, "It's not necessarily that those are the best drugs. Those are the heavily advertised drugs." Drug companies also have taken issue with the formulary because it was created "quietly" and without participation by pharmaceutical interests. Lasher said, "It was done quietly because we wanted to be able to put forward a sound plan without that line of lobbyists trying to shape the plan in their best interests. We were looking at what's in the best interest of the patient and what's in the best interest of the dollars we have" (AP/Detroit News, 12/8). The formulary is available online.