New York Times Examines Preferred Drug Lists in Medicaid Programs

The New York Times today looks at the increasing number of states that are adopting preferred drug lists for Medicaid patients, one of "several steps states have taken in recent years to try to control Medicaid costs." In 2001, only three states used prescription drug formularies. Since then, 19 additional states have adopted preferred drug lists, although not all programs are currently operational, according to the National Conference of State Legislatures. The drug formularies are devised by state review boards that divide drugs into "therapeutic classes," in which the review panel designates the most effective and affordable drugs per class; costlier drugs are excluded from the list. The preferred drug lists "steer doctors away from some of the most expensive drugs" and toward more cost-effective options that the state "deems equally effective," the Times reports. Private health insurers have also begun adopting the formularies to lower costs, and Congress is considering a preferred drug list as part of proposed Medicare prescription drug benefit for seniors. While the overall savings to states are "difficult to judge" because the prices and rebates states negotiate with drug makers are not revealed at the pharmaceutical industry's request, health experts believe the savings could "reach into the billions of dollars." Support for drug formularies "cut[s] across ideological lines" among lawmakers who see the lists as "a way to save money at the expense of big drug companies, not patients." However, patient advocates argue that the lists are a "real danger to patients" who may not respond to a drug on the list or may have a drug interaction. Further, patients' rights groups said that the lists have caused some deaths as states have made it difficult for patients to get the treatment that their physicians deemed appropriate. The Pharmaceutical Research and Manufacturers of America has unsuccessfully sued to block Michigan and Florida from implementing the preferred drug lists (Perez-Pena, New York Times, 6/16).