Stallard: I think they shouldn’t be experimenting when it’s never been tested on children. It’s a big mistake. Sometimes, legislators say they need to be liberal with vulnerable segments of society to give them medicines that may have some benefit. I turn it around and say we shouldn’t be experimenting with the most vulnerable segments of our society.
Antipsychotics & State Lawsuits: Stallard Explains
David Stallard, Assistant AG Utah
More states are filing lawsuits against drugmakers over allegations they failed to disclose side effects caused by their antipsychotics and improperly marketed the pills, therefore, causing state Medicaid programs to overpay for the medications. Meanwhile, many of these same state programs have been paying for antipsychotic prescriptions for unapproved uses in children, such as ADHD. We spoke with David Stallard, a special assistant attorney general in Utah, which sued Eli Lilly last year, about a state’s view of the problem…
Pharmalot: How’d you get involved in this litigation?
Stallard: I was working as an assistant attorney general for about five years and, most of that time, I was working in the Medicaid fraud control unit, spending a large part of my time, almost exclusively the last two years, on civil medicaid fraud, specifically, pharmaceutical fraud with respect to Medicaid.
Pharmalot: There’s that much fraud?
Stallard: There’s a lot of fraud. These are pretty intensive cases and take a lot of time. My opinion it’s because Medicaid drugs are such a huge part of the business for pharmaceutical companies and it’s very attractive market - feeding at the taxpayer trough. I’m kind of a skeptic having worked in the trenches, but pharmaceutical companies try to get as much reimbursement as they can from Medicaid, because it’s a big payer. And not just on price, but utilization. As many pills as they can, and the highest price they can engineer.
Pharmalot: Why did
But with Lilly specifically, there was a lot of off-label use that was promoted by Lilly improperly. It’s actually illegal under Federal Food Drug & Cosmetic Act. But under state law, we’re claiming Lilly improperly marketed the drug and caused us to pay more than we should have.
Pharmalot: But there was another issue raised, right?
Stallard: Yes, and in fact, I wrote a memo that has to do with a second component - medically accepted indications for proper use. My legal analysis of federal Medicaid law is that, in order to be eligible for Medicaid reimbursement, the drug must be covered outpatient drugs. It’s basically a threshold requirement. There is a limitation on the definition of covered outpatient drugs that is tied to use of drug and it does not include ‘a drug or biological used for a medical indication which is not a medically accepted indication.’
Pharmalot: So you’re saying, under that definition, a state Medicaid program shouldn’t be paying.
Stallard: To me, it means that to be eligible for reimbursement for Medicaid - to be a covered outpatient drug - it has to be used for a medically accepted indication. Under that provision, it’s not a covered outpatient drug unless its used for a medically accepted indication. It’s not just a term of art. It’s specifically defined in the federal statute. It has to be FDA approved for use supported by specific compendia.