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Formularies criticized as states cut Medicaid drug costs

Physicians worry that the bottom line is becoming more important than patient care when it comes to Medicaid prescriptions.

By Tanya Albert, amednews staff. April 1, 2002.

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A handful of states are trying to get more aggressive about saving money on Medicaid prescription drug costs but in the process are often burdening physicians with added paperwork and red tape.

The main savings tactic is to require pharmaceutical companies to give the state an even deeper discount on prescription drugs if they want their products to be on the preferred drug list. If a drug doesn't appear on the list, physicians need special approval to prescribe it to a patient.

So far, Maine, Michigan, Florida and New Mexico lawmakers have passed laws or administratively created programs that are some variation of that theme.

"The paperwork burden this has imposed is huge," said Calais, Maine, internist David Simmons, MD, about that state's program. "Many physicians say, 'We won't fill out the paperwork,' and that translates to patient access."

Pharmaceutical Research and Manufacturers of America, a drug industry association, has filed lawsuits that challenge the Maine, Michigan and Florida programs.

The courts have had mixed opinions on whether they'll let rebate programs like these go forward, and the cases are winding their way through the appeals process.

Still, about a dozen other states are leaning toward establishing their own rebate programs, said Ray Hanley, Arkansas Medicaid director and chair of a pharmacy technical advisory group for the National Assn. of State Medicaid Directors.

"It's probably not for everyone, but it is an option that can save money," he said, noting that Arkansas is not considering a rebate program now. "Michigan cleared the way with a lot of legal hurdles, and they have pretty much set the curve." [...]