The Texas Health and Human Services Commission was sued by Pfizer in federal court on November 17, 2016 because the agency released data about the company’s pricing and discounts for Medicaid drugs. The information was given to the chairs who head two committees in the Texas Senate. Pfizer closely guards this information, even keeping it from most of its employees. In its lawsuit, the company contends that handing over the information violated federal law.
Sen. Charles Schwertner, who heads the Health and Human Services Committee, which regulates the Medicaid budget for Texas, first requested the information that was also given to the head of the Senate Finance Committee. The senator said that he wanted the information because the taxpayers of Texas deserved more clarity about drug pricing. He wanted to see the figures despite the fact that the Texas Health and Human Services Commission had assured him that the state was getting a good deal. At first, the Texas agency refused his request, but when the state attorney general said that state law did not prohibit the release of data, it was released.
The Cost of Drugs Generally
Drug costs are an issue in health care because they are rising. According to the article by Kim Janssen appearing on line in the Chicago Tribune on March 15, 2016, prices for brand-name drugs have gone up 98.2 percent in the last five years. The article cites statistics from Express Scripts, a manager of pharmacy benefits. In 2015, almost one-third of brand-name drugs rose in cost by 20 percent annually, and overall they went up by 16.2 percent.
Basis of the Pfizer Lawsuit
The Pfizer information was about prices for Medicaid’s preferred drugs that are negotiated. The company does not want its figures disclosed because they help it to stay competitive. The drugmaker also noted that it was not informed beforehand of the action by the state agency. Subsequent to the release of the figures, Pfizer filed legal action requesting a temporary restraining order and a preliminary injunction to prevent further disclosures.
Pfizer also stated in its lawsuit that the release of this pricing data could result in higher prices for the health programs operated by the state and the federal government. The company further noted that if this information resulted in set prices, then the lower rates Medicaid gets would cease.
Pharmaceutical companies routinely give federal health programs discounts on drugs. Prices for medications are not controlled so drug manufacturers give rebates when dealing with its customers who purchase in bulk. Texas is no exception as it gets rebates when it purchases name-brand medications. Approximately 48 percent of all drugs are only available in the name-brand variety, according to the National Conference of State Legislators. However, the overwhelming majority of prescriptions are filled with generics, it says.
While drug manufacturers say that prices are at there present level because Americans have access to cutting-edge treatments and research to develop new drugs is costly, consumers are not happy. A 2016 Kaiser Health Tracking Poll by the Kaiser Family foundation revealed that 77 percent of Americans thought drug prices were “unreasonable.” This statistic was up from 72 percent in 2015.
Learn more about Drug Lawsuits.