PhRMA sues over Florida Medicaid law

October 1, 2001

Pharmaceutical Representative

The Washington-based Pharmaceutical Research and Manufacturers of America has filed a lawsuit in federal court challenging a new Florida law that seeks to offset a $214 million reduction in the state's Medicaid prescription drug budget by creating a new state Medicaid formulary.

The Washington-based Pharmaceutical Research and Manufacturers of America has filed a lawsuit in federal court challenging a new Florida law that seeks to offset a $214 million reduction in the state's Medicaid prescription drug budget by creating a new state Medicaid formulary.

The new formulary includes less than half of all brand-name prescription drugs covered by the federal Medicaid program. The rest require doctors to obtain special "prior authorization" from state officials before prescribing for a patient.

Rebate agreements

The federal Medicaid law requires that, if a manufacturer has signed a rebate agreement with the federal government, every state must allow the manufacturer's drugs on its formulary unless the state has made a written determination that a drug has no "significant, clinically meaningful therapeutic advantage" with respect to a specific disease or condition over alternative drugs.

"Florida has made no such determination," said Jan Faiks, the trade group's assistant general counsel. "Instead, Florida officials have stated that the payment of a supplemental rebate is a precondition for including a manufacturer's drug on its formulary. PhRMA believes that prescription medicines are an essential part of healthcare and that all citizens should have unrestricted access to the medicines they need."

The Pharmaceutical Research and Manufacturers of America is asking the U.S. District Court to declare the Florida Medicaid Formulary Law invalid on the ground that it conflicts with the federal Medicaid statute, and to issue an injunction prohibiting the law from being implemented. In addition, PhRMA is requesting that the court enjoin the defendants from entering into supplemental rebate agreements with drug manufacturers without authorization from Health and Human Services. The trade group is also asking for a preliminary injunction barring implementation of the law and the rebate agreements while the lawsuit is pending.

Governor, AHCA secretary criticize suit

Florida Governor Jeb Bush and the state's Secretary for the Agency for Health Care Administration Rhonda Medows – a defendant in the suit - criticized the lawsuit, claiming that the Florida law provides seniors with access to medicines they might not otherwise be able to afford.

"We are more concerned about making sure our senior citizens have better access to affordable prescription drugs," said Governor Bush. "Protecting the large profit margins for multi-billion-dollar pharmaceutical companies is not a priority."

Secretary Medows agreed, saying, "This is a suit with national implications that, if successful, would stop Florida and other states across the nation from taking steps to rein in these costs. It is another attempt to preserve profits at the expense of consumers."

According to Florida state officials, the new law will save the state $214 million during the 2001 fiscal year. PR