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Arizona Medicaid Committee Must Disclose Drug-Company Ties

July 30, 2018, 7:17 PM

Arizona wants to limit the influence pharmaceutical companies have on the drugs the state chooses for preferred coverage by its Medicaid program, under a new executive order.

The directive issued July 27 by Gov. Doug Ducey (R) follows a national investigation by the Center for Public Integrity and NPR into how the industry influences the health-care program for low-income people. It found Janssen and Otsuka were among the companies paying a member of Arizona’s Pharmacy and Therapeutics Committee, who collected hundreds of thousands of dollars for work over several years.

Ducey’s order seeks to increase transparency of that committee, which recommends which drugs the state’s Medicaid program should cover. Changes include mandatory conflict-of-interest training and new disclosure requirements.

“Decisions about healthcare should be made objectively and in the best interests of Arizonans, without even the appearance of undue influence,” Ducey said in a statement.

State Policies Under Review

The state’s Medicaid program—known as the Arizona Health Care Cost Containment System, or AHCCCS—already has disclosure rules for members of its Pharmacy and Therapeutics Committee. The committee advises the agency on the safety and effectiveness of drugs for the statewide list.

Health-care and pharmaceutical lobbyists, consultants, and employees can’t join. Other people can apply to become a member.

Members and people testifying before the committee must disclose potential conflicts, such as financial interests in relevant organizations. The recent media investigation, though, raised questions about whether those policies are effective.

The state removed the committee member identified in the report last week, according to a press release. Law enforcement will also investigate the claims that he earned more than $700,000 from drug companies since 2013.

Otsuka and Janssen did not immediately respond to questions from Bloomberg Law. The Pharmaceutical Research and Manufacturers of America, a trade group representing drug companies, also did not respond to questions from Bloomberg Law.

AHCCCS said in a statement that the agency supports the executive order, and policies are undergoing internal review. Changes will be open for public comment before they are finalized, it said.

Mandatory Training, Disclosures

Moving forward, the executive order requires people testifying at committee meetings to say if they represent or have been paid by drug companies. Committee members can’t vote or discuss items when they have a conflict of interest, it says.

The members will take mandatory conflict-of-interest training given by AHCCCS every year. The agency will also post all of their disclosure forms.

AHCCCS will look at public data on payments from medical companies to doctors to decide at what point someone should be disqualified from serving on the committee.

Arizona is making a smart move in increasing transparency, Jack Hoadley, research professor emeritus at Georgetown University’s Health Policy Institute, told Bloomberg Law. Hoadley previously looked at how state Medicaid programs use pharmacy and therapeutics committees to recommend drugs using clinical information.

His research from the early 2000s found the committees generally had significant influence on states’ preferred drug decisions. There’s interest in how to keep similar health-care bodies unbiased and free of possible conflicts, Hoadley said.

“It’s important to be aware of them,” Hoadley told Bloomberg Law.

To contact the reporter on this story: Brenna Goth in Phoenix at

To contact the editor responsible for this story: Brian Broderick at

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