PhRMA Presents Oral Arguments In Lawsuit Against Michigan’s Medicaid Preferred Drug List

The Pharmaceutical Research and Manufacturers of America on Aug. 28 presented oral arguments in U.S. District Court in Washington, D.C., in its lawsuit against HHS Secretary Tommy Thompson and CMS Administrator Tom Scully protesting a Medicaid preferred drug program implemented earlier this year in Michigan, the AP/Philadelphia Inquirer reports (Pickler, AP/Philadelphia Inquirer, 8/29). Under the program, approved by Thompson in January, Michigan organized prescription drugs into therapeutic categories, and a small group of pharmacists and doctors appointed by the state selected several best-in-class treatments in each category. The state asked drug companies to reduce their prices to match the lowest best-in-class price if they wanted their treatments included in the formulary. The program allows doctors to prescribe medications not included on the formulary, but they have to call a group of pharmacy technicians for approval (Kaiser Daily Health Policy Report, 7/2). During the hearing, Jan Faiks, a lawyer representing PhRMA, said, "State programs that restrict access ... violate federal law and can result in harmful consequences to the country's most vulnerable patients." Faiks added that deciding which drugs to prescribe Medicaid beneficiaries should be based on medical necessity, not price, and asked U.S. District Judge John Bates to stop Michigan's program, as well as similar programs in Florida and Louisiana and proposed programs in Connecticut, Missouri, Hawaii, Illinois, Minnesota, Mississippi, New Mexico, North Carolina, Ohio, Vermont and West Virginia (AP/Philadelphia Inquirer, 8/29). A group of 10 governors filed a brief defending the drug lists, saying that such formularies might save states up to 10% of Medicaid costs. The generic drug bill (S 812) passed by the Senate in August includes an amendment that would authorize state Medicaid drug formularies (Goldreich, Congressional Quarterly, 8/29).

Explanation Needed
Although Bates did not say when he might rule on the lawsuit, he criticized Michigan for not providing written explanations of why certain drugs were excluded from its formulary. Charles Cooper, a lawyer for the state, said the excluded drugs "lack[ed] special therapeutic advantage." PhRMA plans to continue its challenge of Michigan's program in a state lawsuit scheduled for a hearing by the Michigan Court of Appeals next month (AP/Philadelphia Inquirer, 8/29). See related story on West Virginia's efforts to implement a Medicaid preferred drug list.