As a cost saving measure, New York State will only pay for drugs for Medicaid patients that are on a "preferred list" of medications. As Newsday reports:
The "preferred drug list" was adopted by lawmakers to curb the skyrocketing costs of prescription drugs. To get on the list, drug companies must pay the state large cash rebates. Medicaid will only cover drugs on the list.
However, when the legislation was adopted, it was agreed that state health bureaucrats would still agree to allow Medicaid reimbursement for drugs not on the list if physicians thought they were medically appropriate. Now, Republican Gov. George Pataki wants to make it harder for patients to get access to drugs that are not on the state's list. Medicaid has been screwing doctors for a long time by cutting reimbursement rates and the result is that more and more physicians are refusing to treat Medicaid patients. New York evidently now wants to expand this successful policy to pharmaceuticals.
Pataki's proposed tightening of the screws on drug reimbursement is an example of how the US will eventually slip into "universal" (and inferior) health care–one price control scheme at a time.