-Caveat Lector-
Pharmaceutical Industry Sues Govt.
By ROSS SNEYD= Associated Press Writer=
MONTPELIER, Vt. (AP) _ The pharmaceutical industry sued the federal
government Wednesday in a bid to block Vermont from offering
cut-rate prescriptions to a broader range of people through Medicaid.
Vermont is scheduled to begin signing people up for the new program
on Jan. 1, but the industry asked a federal judge in Washington, D.C.,
to suspend it while the lawsuit is pending.
Pharmaceutical Research and Manufacturers of America, a trade group
representing the industry, has opposed the program ever since it was
conceived by Howard Dean, Vermont's governor.
So, PhRMA has taken the same arguments it made to U.S. Health and
Human Services Secretary Donna Shalala's staff to U.S. District Court.
``The cost and financing of prescription drugs for lower income
individuals is an issue of national importance and has been the subject
of extensive debate in the legislative and executive branches of the
federal government and many state governments,'' PhRMA's lawsuit says.
Vermont's program relies on Medicaid, the federal-state health
insurance program for the poor, to help reduce prescription drug
prices for thousands of people who otherwise wouldn't qualify for
Medicaid coverage.
Altogether, that would amount to a discount of an average of 30
percent. The actual discount would be more or less, depending on the
particular drug that someone has to take.
Some of those provisions were ones that drew the industry's
objections.
``One of the provisions in the Medicaid law says that Medicaid
beneficiaries can be charged no more than nominal co-payments for
their medical services,'' said Marjorie Powell, PhRMA's assistant general
counsel. ``Under the waiver as approved ... these new Medicaid
beneficiaries would be paying 82.5 percent of the cost of their drugs.
That's clearly more than a nominal co-payment.''
Vermont is the only state that has won federal approval for such a
plan, but other states are interested because it would transfer
discounts for which they qualify to a broader segment of their
populations. New Hampshire, for example, already has applied for
approval of an identical program.
Vermont Human Services Secretary Jane Kitchel said she had not been
informed of the lawsuit, but she said she was not surprised that the
industry would seek to block what would be a small program in a small
state.
``It's not because the numbers are large in Vermont,'' she said.
``It's the precedent here.''
Mary Kahn, a spokeswoman with the federal agency, said she would
not comment because her department had not been notified of the
lawsuit.
AP-NY-12-13-00 2339EST
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