my proposal to Gov. Haley: medicaid savings

I’ve received many questions about a remark Gov. Haley made in her state-of-the-state address last week. Here’s what she said:

The majority of prescription drugs issued by Medicaid are generic, with three large exceptions: AIDS, cancer, and mental health. We propose, following the lead of Senator Kevin Bryant, a pharmacist himself, that we remove the proviso prohibiting the use of generic medications to treat those three afflictions.
I realize that this may sting pharmaceutical companies, and some lobbyists, but it is an option that will allow us to realize real savings without compromising the quality of care for our patients.

I met with Gov. Haley recently, and stressed the potential savings if we make this change. As a pharmacist, I witness wasted taxpayer money on prescription drugs on a daily basis.Currently, Medicaid has a process called prior authorization or PA. This process is applied to some medications. In these situations, generic alternatives must be used first, and in the instance that the generic drug does not work; the more expensive medication may be dispensed. In no way is quality of care in jeopardy. If a consumer is paying cash for a product, naturally, they will try the least expensive option first. When the taxpayer is required to pay for medications covered by Medicaid, I believe we should take the same approach.

Prior Authorization is applied to many life threatening therapeutic classes with little or no problems, yet with exponential savings of the taxpayers’ money. We apply the PA’s to medications treating diabetes, blood pressure, esophageal reflux, and many, many more.

I am confident that there is much room for savings in the mental health, aids, and chemotherapy areas. Currently, the legislature has banned the Pharmacy and Therapeutics Committee from even considering utilizing the PA in these three categories.

For example, in 2010 Medicaid spent $23.7 million on 3 drugs (Zyprexa, Seroquel, & Abilify). Applying a prior authorization mechanism on these drugs would only mean that less expensive alternatives be tried first. Even though many patients may still qualify for these meds, the PA possibility will still save  money as drug manufacturers are more cooperative with negotiations on rebates when the prior authorization is a possibility.

Adding prior authorizations to Aids and Chemotherapy drugs may not save much, but there is still merit in expanding the PA to these categories. As you know, the hiv virus in a constantly changing organism and cancerous conditions are ever-changing, so therapies are constantly changing. But remember, the PA possibility does increase the rebate negotiating factor.