Medicaid Formulary Restrictions May Increase Costs
Many payers establish cost-control measures for expensive medications, particularly the current crop of branded antipsychotics, like Zyprexa, Abilify, Invega, Latuda, and Saphris. These medications are sometimes over $500 per month when paid at full-price. For most Medicaid payers, these atypical antipsychotics are the most costly drug category they manage, so cutting access to these drugs during these times of state budget cuts becomes an attractive target.
Mechanisms to limit the use of these drugs include formularies, preferred drug lists (PDLs), fail-first policies, tiering strategies, dosage limits, pill count limits, limits based on diagnosis, and prior authorizations. Adding hoops through which the prescriber or patient must jump is known to reduce the utilization of target medications while funneling medication decisions into less costly generic or lower cost drugs. However, these same barriers can also result in increased costs when consumers fail to obtain the prescribed medication, causing them to go without medication and potentially resulting in a relapse that can lead to avoidable ER (emergency room) visits and hospitalizations.
The 2009 study by Joyce West, et al., in Psychiatric Services (“Medicaid Prescription Drug Policies and Medication Access and Continuity: Findings From Ten States”) found that Medicaid patients with medication access problems had 3.6 times the number of adverse events (including ER visits, hospitalization, homelessness, suicidal ideation, and incarceration). States with more stringent cost-control mechanisms were associated with more access problems and more adverse events. Patients who required a prior authorization were three times more likely to have a psychiatric hospitalization and twice as likely to have an ER visit. Those who required the use of a preferred drug list or formulary were 2.3 times more likely to be hospitalized and 1.8 times more likely to have an ER visit.
With the high costs of hospitalization and emergency care, this begs the question of whether the savings produced by these pharmacy management methods are outweighed by the excess costs associated with increased care needed when patients stop taking medications due to access problems. Indeed, each state should ask for independent analyses of their medication claims and inpatient and outpatient utilization data to determine where the greatest benefit lies. Unfortunately, the impression is that short-term, line-item cost reductions are emphasized rather than a system level focus.
In Maryland, where I sit on the Medicaid Pharmacy Program’s Pharmacy & Therapeutics Committee (P&T), we have moved over the past 3 years or so from an open access position (for psychotropics) to one with increasing restrictions based on a preferred drug list (PDL), which now has three tiers. P&T is advisory to the health department, but often accepts our recommendations. There is also a Drug Utilization Review Committee (DUR) that also advises on drug utilization issues. Up until last month, the minutes from these committees were not made available on their website, but now contain the 2010 meetings for both P&T and DUR. Most states have their full minutes posted. Each of the meetings are public and permit limited public testimony (except for DUR, which does not accept public input).
The mechanism we now have in place to limit use of antipsychotics is complex, but I’ll try to explain it. Maryland Medicaid now has two classes of antipsychotic medications in its formulary, Preferred and Nonpreferred. Drugs that are Preferred are on the PDL (Preferred Drug List). The PDL is split into Tier 1 and Tier 2 categories: Tier 1 meds never require a prior authorization. Tier 1 currently includes older generic antipsychotics, generic risperidone and clozapine, Fanapt, Geodon, and Risperdal Consta depot injection. Tier 2 includes only Zyprexa and Abilify. Tier 3 includes Invega, Latuda, Seroquel XR, Saphris, Invega Sustenna depot injection, and Zyprexa Relprevv depot injection.
Tier 1 drugs never require a prior authorization. Patients who are considered “drug-naïve” -- and so have never been on an antipsychotic before and should have fewer constraints about which drug to first try -- must be tried on a Tier 1 medication for at least 6 weeks (i.e., has filled at least two prescriptions) before trying a Tier 2 drug. Tier 2 medications do not require a prior authorization as long the patient has previously been on a Tier 1 drug for 6 weeks within the most recent 120 days. This 120-day period is the “look-back period.” If you want to try a Tier 2 drug on a “drug-naïve” patient, a prior authorization must be completed. (As noted above, requiring a prior authorization is more likely to be associated with delays in obtaining medications, sometimes causing patients to stop medications, potentially resulting in increased ED visits and hospitalizations.) Tier 3 medications -- also called Nonpreferred drugs -- always require a prior authorization.
