Michigan Appeals Court Says State’s Drug Formulary Legal

The Michigan Court of Appeals on Dec. 16 unanimously ruled that a state preferred drug program, which limits the drugs doctors can prescribe to patients enrolled in state insurance programs, is legal, the AP/Detroit Free Press reports (Durbin, AP/Detroit Free Press, 12/17). Under the program, approved by HHS Secretary Tommy 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 for their treatments to be included in the formulary. The program allows doctors to prescribe drugs not included on the formulary, but they have to call a group of pharmacy technicians for approval (Kaiser Daily Health Policy Report, 7/2). The Pharmaceutical Research and Manufacturers of America and mental health advocates claimed the formulary -- which the state Department of Community Health says saves the state $850,000 each week -- is dangerous and unconstitutional because the full Legislature never considered the program, the AP/Free Press reports. A lower court sided with PhRMA and issued a temporary injunction to stop the program. But the Court of Appeals lifted the injunction while it heard arguments in the case and approved the program yesterday, finding that the Legislature had given DCH the "authority to administer health care programs," the AP/Free Press reports. DCH Director James Haveman said, "This allows us to continue to offer high-quality health care to low-income Michigan citizens and prudently manage costs." PhRMA spokesperson Bruce Lott said, "Patients in Michigan are being denied the medicines their doctors want them to have" (AP/Detroit Free Press, 12/17).

Texas
In other court news, a group of pharmacists in Texas on Dec. 16 filed suit against the state alleging that new Medicaid reimbursement rules would "put drugstores out of business" and make it more difficult for low-income adults to obtain medications, the AP/Fort Worth Star-Telegram reports. The plaintiffs, including nine pharmacies and the Texas Pharmacy Association, also won an injunction on Dec. 16 to temporarily stop the Texas Health and Human Services Commission from implementing the rules. Although the new rules mean pharmacists will receive "more on average" for each prescription drug, up from $6.36 to $6.87, the pharmacists contend they will receive less for "more expensive medications," the AP/Star-Telegram reports. The changes are expected to save the state $33 million over the next two years. But Sen. Leticia Van de Putte (D), a pharmacist who opposes the reductions, said the cuts and added copayments should not force pharmacists and Medicaid patients to bear the brunt of the cost savings. She said, "We all understand belt-tightening, but what we're saying is there's a better way to do this" (Mabin, AP/Fort Worth Star-Telegram, 12/17).