Drug Companies Are Influencing Medicaid’s Preferred Drugs With Big Dollars

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Julia Cohen Reporter
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Drug company representatives are bombarding state Medicaid drug committees with money, perks, and information to influence their decisions, according to a Thursday Center for Public Integrity report.

In many states, doctors and pharmacists, often volunteers, sit on committees to decide what drugs will be on Medicaid’s preferred drugs list. “Preferred” drugs are supposed to be the best “deal” for state Medicaid programs, providing effectiveness with low cost, the National Council of State Legislatures explains.

Doctors often have to fill out cumbersome, extensive paperwork to prescribe drugs not on the preferred list to Medicaid patients. This incentivizes doctors to stick to the preferred lists. Since doctors are more likely to choose preferred drugs, it can mean big dollars for pharmaceutical companies to get on these lists.

The problem is that drug companies are infiltrating these committees both through paying other doctors to testify to them and paying committee members themselves, the Center for Public Integrity report explains.

“I have no financial disclosures,” Dr. Divyansu Patel told the preferred drug committee in Texas before he gave a presentation on Rexulti. In reality, the company that manufactures Rexulti, Otsuka America Pharmaceutical Inc., paid Patel $12,000 over two years to give positive speeches about the drug, according to the Center for Public Integrity. (RELATED: HHS Takes First Step To Import Prescription Drugs)

In another Texas case, drugmaker AstraZeneca “defrauded the Texas Medicaid Program with false and misleading marketing of Crestor, a prescription heart drug” by paying a doctor to give the Medicaid drug committee a glowing review of the drug. The doctor did not reveal to the committee that AstraZeneca told him what to say in exchange for pay.

Some drug companies went straight to the source and paid the committee members themselves. In Arizona, one doctor on the preferred drugs committee, Dr. Mohamed Ramadan, made more than $700,000 since 2013 from various drug companies for consulting and speaking engagements, the Center for Public Integrity Reports.

He missed a little under half of the committee meetings, but showed up to the meetings discussing drugs from the companies that paid him.

“Healthy interaction with pharmaceutical companies is important,” Ramadan told the Center for Public Integrity.

Overall, three out of five doctors on Medicaid drug committees got some sort of payment from drug companies, be it in terms of money or other perks, according to the Center for Public Integrity. In contrast, half of doctors overall received perks or payment from drug companies.

Doctors who get money from pharmaceutical companies are more likely to prescribe that company’s drugs to their patients, according to the report.

The U.S. government spent $32.5 billion on prescription drugs under the Medicaid program in 2015, according to the Brookings Institute. On average, states and the federal government spent about $275 for each patients’ prescriptions in 2013, according to the Center for Public Integrity report. By 2016, that number had ballooned to a little over $400.

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