Federal court upholds Michigan Medicaid drug formulary plan

The drug industry says the initiative, copied by other states, puts patient care in jeopardy.

By Tanya Albert, AMNews staff. April 28, 2003.

More than a year after Michigan implemented a Medicaid drug formulary in an effort to save money, physicians are still working through kinks in the program, and courts are still reviewing the law to decide whether it's appropriate.

In the latest court round, the state's statute came out on top. The U.S. District Court for the District of Columbia in late March upheld the law, which requires physicians to get prior authorization before prescribing Medicaid patients medications that aren't on the formulary.

But the Pharmaceutical Research and Manufacturers of America and two patient groups in Michigan already have vowed to appeal the decision because they fear that the law will hurt patient care, particularly for Medicaid recipients who are being treated for mental illnesses.

"It's a mess," said Kathleen Gross, the Michigan Psychiatric Society's executive director. "And it's spreading, because I'm getting calls from other states that are considering similar programs."

Many eyes are on the lawsuit, PhRMA, et al. v. Tommy Thompson, et al. The current court decision allows similar laws in at least a dozen states to remain in place, according to the National Conference of State Legislatures.

In the first 10 months of 2002, 24 states enacted legislation pertaining to Medicaid preferred drug lists, prior authorization, supplemental rebates, generic drug substitution, co-payments, and prescribing and dispensing limitations, the NCSL said. The laws include everything from studying the issues to creating programs. More specifically: