Judge Blocks Michigan Medicaid Rx Drug Formulary
A Michigan judge yesterday issued a preliminary injunction to block a state program that would require pharmaceutical companies to provide discounts to have their drugs placed on the state's formulary for Medicaid and other public health insurance programs, the Wall Street Journal reports (Gold, Wall Street Journal, 8/8.) The program, set to take effect Jan. 14, would cover about 1.6 million Medicaid beneficiaries and seniors in state-sponsored programs. Under the program, the state would organize treatments into therapeutic categories, and a small group of pharmacists and doctors appointed by the state would select several best-in-class drugs in each category to establish the formulary. For drugs not initially selected for the formulary, the state would ask pharmaceutical companies to reduce their prices to match the lowest best-in-class price. Doctors could prescribe drugs not on the formulary but would need to call a phone bank of pharmacy technicians for approval.
The Pharmaceutical Research and Manufacturers of America filed suit in Michigan court last November, alleging that the program violates the state constitution and state laws. Ingham County Circuit Court Judge Lawrence Glazer yesterday ruled that Michigan "did not have the statutory authority" to require pharmaceutical companies to offer discounts on drug prices (Wendland-Bowyer, Detroit Free Press, 1/8). Glazer also said that the "unorthodox manner of implementing the law" -- according to the Wall Street Journal, Michigan gave several state lawmakers "what amounted to a veto over the policy" after Gov. John Engler (D) had signed it into law -- violated the state constitution (Wall Street Journal, 1/8). In addition, he said that the program "could be harmful" to patients (Washington Post, 1/8). For example, mental health advocates who joined the lawsuit said the program would restrict access to some drugs for the mentally ill (Wall Street Journal, 1/8).
PhRMA spokesperson Jan Faiks called Glazer's ruling a "victory" for the group and for Michigan patients (Detroit Free Press, 1/8). According to Faiks, Michigan's prescription drug program "interferes with doctors' freedom to prescribe what they feel is the most appropriate drug" and could lead to "tremendous potential harm to the doctor-patient relationship and ultimately to the patient's health." However, Geralyn Lasher, a spokesperson for the Michigan Department of Community Health, said that the program does not prevent doctors from prescribing drugs not on the formulary. "If a drug is medically necessary, that is the drug a recipient will get," she said. The agency has filed an emergency appeal with the state appellate court and hopes to implement the program on Jan. 14 "as planned." Michigan officials estimated that the program would save the state about $42 million this year (Wall Street Journal, 1/8). They said that the program would help control the state's drug costs for low-income patients, which have reached $1 billion per year (AP/Las Vegas Sun, 1/7).