Pfizer sues Texas over Medicaid drug pricing data

Money Pills

Drug giant Pfizer has filed suit against Texas' biggest government healthcare entity, claiming it illegally divulged trade secrets.

Pfizer filed suit against the Texas Health and Human Services Commission, according to The Dallas Morning News. New York-based Pfizer claimed that the commission hurt its business when it provided the prices the company had negotiated for drugs it sells to the state Medicaid program to two state lawmakers.

Pfizer's lawsuit, which was filed in Austin, claimed such information was on a “need to know” basis only.

“Small differences in pricing and rebates can make the difference between success and failure,” Pfizer in said a statement to the newspaper. “If public disclosure were to lead to uniform pricing, the low rates that Texas Medicaid enjoys would disappear.”

The lawsuit is an escalation of tensions between the pharmaceutical giant and policymakers in Texas. A spokesperson for the Health and Human Services Commission told the newspaper that more discourse was needed for a full debate regarding drug prices and that it was unacceptable to “choose between innovation and affordability.”

Meanwhile, drugmakers such as Pfizer have come under increasing criticism for prices that have skyrocketed in recent years. Brand-name drug prices have nearly doubled since 2011, according to the article.

Moreover, some questionable business practices have accompanied some of the price increases. For example, the drug Daraprim, which has been available since the early 1950s, saw its price increase more than 50-fold after the company that sold that drug was bought out by Turing Pharmaceuticals. That prompted Express Scripts to intervene with a lower-cost alternative.

The drug price increases have also put the squeeze on hospitals and healthcare systems. Beaumont Health in Michigan, for example, saw its costs for drugs rise $20 million in a single year, putting a significant dent in its bottom line.