When did the folks at Southwest Pharmacy Solutions get the idea the market for their products was somehow free between the funhouse mirrors of Medicaid?

The Corpus Christi pharmaceutical company is suing Thomas Suehs, executive commissioner of the Texas Health and Human Services Commission, to find out, according to the Austin American-Statesman today.

From the time the Legislature passed its health reform package last June, the pharmaceutical industry has warned that Medicaid savings were going to be squeezed out of doctors and drug companies rather than bureaucratic reform.

Southwest Pharmacies says in its suit the new reimbursement format effective in March inserts bureaucrats called pharmacy benefit managers to broker what used to be a direct transaction between Medicaid and pharmacies.

Those benefit managers will not be constrained by state compensation guidelines and will be free to pound drug companies, the lawsuit says.

Health and Human Services officials have long contended prices for every item or service in Medicaid are distorted. The state has realized some savings through managed care systems employing pharmacy benefit managers and hopes to save taxpayers another $300 million bringing managed care to the Rio Grande Valley.

Of that total, the state hopes $100 million will come from the pharmacy reimbursement system Southwest Pharmacies is resisting, health agency spokeswoman Stephanie Goodman says.

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Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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Photo of pills by RambergMediaImages, used via a Creative Commons license.