Preemptive Pricing

The 8th U.S. Circuit Court of Appeals has rejected Iowa’s plan to offer brand-name medicines to Medicaid patients when it can get them at a lower price through government rebates.

In its ruling, the 8th Circuit noted that the U.S. secretary of Health and Human Services in 2007 "expressly rejected Iowa's approach" when he issued new federal limits on brand-name versus generic drugs.

That’s unfortunate since it will lead to Iowa having to spend about $1,000,000 more on drug costs.  But what’s really intriguing is the language the court used to justify it’s decision:

"Iowa now invites this court to second-guess the agency's expertise by attacking the policies underlying CMS's decision," the court wrote in its ruling. "However appealing Iowa's approach may appear to be as a matter of policy, we must give CMS the deference it is owed as a matter of law."

So there is preemptive authority when it comes to pricing – but their isn’t preemptive authority when it comes to safety?  An unfortunate allegory akin to health reform really being abot cost containment rather than patient care.

The complete story can be found here.