Drug Industry Lawsuit Challenging Michigan’s Preferred Drug List for Medicaid Beneficiaries to Begin

The Pharmaceutical Research and Manufacturers of America's lawsuit challenging a new Michigan Medicaid formulary, which requires that patients receive special approval for certain medications and that some drug makers "cut deals" with the state to be on the "preferred" drug list for Medicaid and other public health insurance programs, begins on Jan. 7 in state court, the Detroit Free Press reports. PhRMA alleges the plan, scheduled to take effect on Jan. 14 in an attempt by the state to curtail its drug spending, violates the state constitution and state laws. Court proceedings today are expected to include arguments on whether the judge should grant a preliminary injunction postponing the launch of the program (Wendland-Bowyer, Detroit Free Press, 1/7). The program, which is projected to save the state at least $42 million, applies to Medicaid beneficiaries and seniors in state-sponsored programs and covers a total of about 1.6 million residents. The program has organized medications into therapeutic categories and a small group of pharmacists and doctors appointed by the state have chosen a few best in class drugs in each category to form the preferred list. The state asked companies to lower their price to match the lowest best in class price for any drug not selected for the formulary. To prescribe non-preferred medications, doctors will have to justify their decision in a telephone call to a phone bank of pharmacy technicians -- a requirement expected to discourage use of those drugs. The drug industry says the program would limit patients' ability to obtain medications and threaten their quality of care (Kaiser Daily Health Policy Report, 12/3/01).

Mental Health Concerns
The judge in the case is also expected to hear a motion from several mental health advocacy groups to join PhRMA as plaintiffs. These groups contend that any savings the state may see would "come on the backs of those who can least afford it," pointing to the absence from the list of drugs such as Ritalin, used to treat attention deficit hyperactivity disorder, Clozaril, a schizophrenia therapy, and Geodon, Zoloft and Prozac. Mark Cody, Michigan Protection & Advocacy Services senior attorney, said, "One thing mental health consumers don't need is to be put through an additional burden in trying to get the medications they want and what their doctor feels is best and most appropriate." However, Geralyn Lasher, a state health department spokesperson, said, "These drugs were not picked by bean counters. These were drugs evaluated and reviewed by doctors and pharmacists in a very thorough and complete process." Michigan is the latest state to attempt to reduce Medicaid drug costs by limiting the number of drugs available to beneficiaries. Florida's formulary, which is similar to Michigan's, was upheld in federal court last week, but differences in the two cases make it "hard to predict what will happen" in Michigan (Detroit Free Press, 1/7).