The Preferred Drug List annual report has been posted. The executive summary is below and a link to the complete report immediately follows.
Executive Summary
In response to rapid growth in prescription drug expenditures, H.B. 2292, 78th Legislature, Regular Session, 2003, directed the Texas Health and Human Services Commission (HHSC) to implement a preferred drug list (PDL) for the Medicaid program and the Children鈥檚 Health Insurance Program (CHIP).
HHSC implemented a Medicaid PDL in early 2004. The PDL controls spending growth by increasing the use of preferred drugs, which are selected prescription drugs that are safe, clinically efficacious, and cost effective compared to other, similar drugs on the market. Non-preferred drugs require prior authorization (PA), but are still available through the Medicaid program. With a PDL, Medicaid clients have access to all of the drugs that Medicaid is required to cover under federal law, including those covered before the PDL was established.
The first phase of the Medicaid PDL, representing 15 therapeutic drug classes, was implemented on February 23, 2004. HHSC has periodically added drug classes to the PDL. The current PDL consists of 66 drug classes, which represented approximately 71 percent of the total $2.12 billion in Medicaid pharmacy expenditures in fiscal year 2009.
Government Code, Chapter 531, Subchapter B, Section 531.070, requires HHSC to provide a yearly written report on the PDL program to the Legislature and the Governor. HHSC has included the following information in this year鈥檚 report:
路 Background information on PDLs.
路 Medicaid PDL process.
路 PDL process for generic drugs.
路 Strategy for the development of the CHIP PDL.
路 PDL program benefit proposals.
路 Cost of administering the PDL.
路 Savings from the PDL.
路 Statistical information related to the PA process and the number of approvals granted and denied.
路 Impact from the implementation of Medicare Rx.
路 A basic health outcomes analysis, including an analysis of the utilization trends for certain medical services for one drug class.
The following is a brief summary of key sections discussed in detail in this year鈥檚 report.
The PDL Process
The Medicaid PDL process generally continues to operate as it has in previous years. In June 2007, the PDL was made available to prescribing practitioners and pharmacists through the Epocrates drug information system. Epocrates is a web-based tool that provides instant access to information on the drugs covered on the Texas Medicaid formulary and PDL. The formulary information in Epocrates can also be downloaded to a handheld device. In November 2009, HHSC implemented an additional formulary search application on the HHSC website. With this application, providers and stakeholders can search for drugs that are on the Medicaid formulary and get important information about the current PDL.
Cost of Administering the PDL
Costs for Medicaid PDL administration include a contract to assist the state in supplemental rebate negotiations with drug manufacturers and a contract to provide PA services. Administrative costs for PDL-related services provided under the two contracts totaled $3.73 million in fiscal year 2008 and $3.67 million in fiscal year 2009 (all funds).
Savings from the PDL
HHSC estimates the Medicaid PDL has resulted in savings of approximately $115 million general revenue in fiscal year 2009 on a cash basis. PDL savings for the 2008-09 biennium are estimated to be approximately $246 million in general revenue.
PA Process and Statistics
PAs include both automated PAs and PAs requested through the PA call center. The automated process, Smart PA, uses a computer system with patient information on file from paid Medicaid pharmacy and medical claims to determine if a patient鈥檚 medical history indicates that a PA should be approved. If the claims history does not demonstrate that a patient meets the PA criteria, the prescriber or his representative must request a PA through the call center.
During fiscal year 2008, monthly PDL PA requests ranged from a low of 35,088 to a high of 54,251. In fiscal year 2009, monthly PDL PA requests ranged from a low of 37,034 to a high of 55,216. HHSC implemented significant changes to the PDL in mid January and mid July of each fiscal year. PA requests will typically increase in the first few months following changes to the PDL, and as prescribers become familiar with the changes to the PDL and adjust prescribing patterns, requests for PAs will decline. Since the implementation of the Medicaid PDL, denied PA requests have been below 13 percent each month.
Impact of Medicare Rx on the Medicaid PDL
Effective January 1, 2006, approximately 320,000 to 340,000 Medicaid recipients who were also eligible for Medicare, also know an dual-eligibles, became eligible for drug coverage through the Medicare prescription drug program, Medicare Rx. These dual-eligible recipients stopped receiving prescription drugs through the Medicaid Vendor Drug Program, except for a very limited number of drugs excluded from the Medicare Rx program.
While total drugs expenditures in the Medicaid program decreased from fiscal year 2005 to fiscal year 2009, the PDL savings as a percent of total expenditures actually increased from 9.16 percent in fiscal year 2005 to 17.24 percent in fiscal year 2009 on a cash basis.
Health Outcomes Analysis
Since the implementation of the Medicaid PDL in 2004, HHSC has performed three studies to determine if client health outcomes have been negatively impacted by the PDL or PA process. In November 2007, HHSC staff conducted an analysis of health outcomes for Medicaid clients diagnosed with migraine headaches. Staff reviewed Medicaid claims data to observe any changes in frequency of utilization of emergency department services or utilization of short-acting narcotics after the PDL status changed for certain drugs used to treat migraine headaches. In addition to the 2007 study, two other studies were performed in 2005 to evaluate drugs used in the treatment of asthma and schizophrenia or affective psychosis. All three studies included drugs used in the maintenance and treatment of chronic conditions where the lack of treatment could be expected to result in acute exacerbations. All three studies yielded similar results, with no adverse health outcomes due to the adoption of and/or changes to the PDL.
In conducting the 2007 study, researchers found it difficult to evaluate the impact the PDL may have had on health outcomes. This difficulty was due to the fact that it was no longer possible to compare pre-PDL and post-PDL subject groups, since a significant amount of time had passed since the PDL was initially implemented in early 2004. The lack of a pre-implementation control group and the myriad of factors influencing recipient health status did not allow for a true evaluation of the impact of the PDL changes on health outcomes.
Please click on the link to the view the complete report: http://www.hhsc.state.tx.us/reports/2010/Preferred-Drug-List-2009.pdf