State Pharmaceutical Plan Wins
in Federal Court
Gongwer News Service, March 28, 2003
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Michigan's controversial pharmaceutical plan requiring
physicians to use a state approved list of drugs won a
critically important ruling in federal court in Washington, D.C.
U.S. District Court Judge John Bates rejected arguments by
pharmaceutical manufacturers and mental health advocates that
Michigan improperly instituted the formulary program without
first getting approval of the U.S. Department of Health and
"This is a victory for the state of Michigan and for all
Medicaid beneficiaries," Governor Jennifer Granholm said in a
press release. "We had confidence that our program complied with
state and federal law, and this ruling will allow us to continue
to provide high-quality pharmaceuticals to persons in need while
being prudent purchasers of healthcare."
The controversial program was begun last year as a way to save
money on Medicaid. State officials say that under the program
Michigan saves as much as $850,000 a week. Michigan spends more
than $1 billion in Medicaid pharmaceutical costs.
But opponents charged that the program limited the ability of
physicians to prescribe the best drugs for their patients. State
officials replied that exceptions when medically necessary were
permitted; they simply had to be reviewed.
This is the second major legal victory for the state on the
program. The Michigan Court of Appeals ruled in its favor last