Florida Can Continue Medicaid Formulary, Judge Rules
A federal judge ruled Friday that Florida may continue requiring pharmaceutical companies wanting to be listed in the state's preferred Medicaid drug list to offer the state rebates, the Wall Street Journal reports. In May, state lawmakers approved a plan to create a list of preferred Medicaid drugs that includes only those brands whose makers agree to offer a 10% supplemental rebate on top of the average federal rebate of 15.1%. Doctors wanting to prescribe drugs not on the list must get verbal authorization from "a phone bank of pharmacists and pharmacy technicians." The Journal reports that the "inconvenience" of prescribing drugs not on the list "discourages" doctors from prescribing more expensive medications. For example, after the plan took effect, GlaxoSmithKline PLC's anti-migraine drug Imitrex, which isn't on the list, fell from a 60% market share in the state to just 6%. Meanwhile, Merck & Co.'s market share on its anti-migraine drug Maxalt, which is on the list, rose from 16% to 89%.
The Pharmaceutical Research and Manufacturers of America filed a lawsuit in U.S. District Court in Northern Florida in August, arguing that Florida's plan breaks federal law, which says that all prescription drugs must be available to Medicaid beneficiaries unless the drug offers "no clinically meaningful benefit." The judge ruled that while the list "steered doctors and patients toward certain preferred drugs," it didn't "prevent access" to nonpreferred drugs. PhRMA will file an appeal on the Florida ruling in the 11th U.S. Circuit Court of Appeals in Atlanta. According to the Journal, the ruling is a "major setback" for the pharmaceutical industry, and may encourage more states to implement similar plans. "As the legal hurdles melt away, I think more and more states will pay attention," Greg Vadner, the Missouri Medicaid director and vice chair of the National Association of State Medicaid Directors, said. Michigan already has a program "partly modeled" on the Florida program. PhRMA has also filed a lawsuit that seeks to block implementation of Michigan's plan (Gold, Wall Street Journal, 1/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.