The lawsuit, filed in federal court in Washington, asks for a preliminary injunction to stop a program already running in Michigan. The lawsuit also seeks to prevent 11 other states that are at various stages of either implementing or seeking approval for similar programs.
"States are putting bureaucrats and bean counters in charge of their Medicaid drug programs," said Jan Faiks, assistant general counsel for the Pharmaceutical Research and Manufacturers of America. "Doctors should be allowed to make decisions based on what's best for patients.
The lawsuit charges that Health and Human Services Secretary Tommy Thompson overstepped his authority under federal Medicaid laws by approving the Michigan program.
A spokesman for the Department of Health and Human Services called it disappointing "at a time we're trying to provide states with flexibility to extend access to people who otherwise might not get it that the pharmaceutical companies have sued us to stop the program from going forward," said HHS spokesman Bill Pierce.
Medicaid, which is financed with federal and state money, provides health insurance for the nation's poor.
Under Michigan's Medicaid prescription drug program, which began earlier this year, doctors are required to use a list of authorized drugs when treating Medicaid patients. Drug companies had to promise large discounts to get on the list. If doctors want to prescribe a drug that isn't on the list, they must get approval from a state technician.
Several patient advocacy groups have complained that the program is preventing sick patients from getting much-needed medications.
States with already-strapped budgets argue that the program is one way to control costs.
For instance, Ohio officials have said such program could save that state as much as $65 million a year.
In addition to Michigan, states that are in various stages of trying to implement preferred drug lists for Medicaid patients are Florida, Hawaii, Illinois, Louisiana, Minnesota, Mississippi, New Mexico, North Carolina, Ohio, Vermont and West Virginia.