Drug-list change could cut bill for state's taxpayers

Critics fear a preferred drug list for psychiatric medicines may hurt some patients. OWEN RILEY JR./Staff e-mail this story print this story Related Related Web site • Ways to cut drug costs • State's preferred drug list • South Carolina Medicaid Click on the help icons for information on these links and any programs needed to open them.

Under the state's Medicaid program, beneficiaries with hypertension, for example, must be prescribed blood pressure medication from a preferred drug list. To order other drugs for that condition, physicians need prior authorization from Medicaid.

The policy helps keep drug costs down, said Dr. Mark O'Rourke, an oncologist with CancerCenters of the Carolinas and a member of the state's Medicaid Pharmacy and Therapeutics Committee.

But there is no preferred drug list for mental illnesses, HIV or cancer, conditions that the state Legislature carved out of the regulations. And that means the state is "pouring tens of millions down the drain," said O'Rourke, who has written to Gov. Mark Sanford asking that a preferred drug list be established for those illnesses.

While the idea sounds reasonable on the surface, it poses some problems for mentally ill people, said Dave Almeida, executive director of the South Carolina chapter of the National Alliance for the Mentally Ill. Many patients must try several drugs before finding the one, or the combination, that works for them, he said. Others find the side effects of some drugs intolerable.

"There is no one size fits all here," Almeida said. "We believe that psychiatrists and patients need to have the flexibility to try all the medications.

"And the problem with prior authorization is the doctor has to pick up the phone, fill out a form, submit it to Medicaid — there's another layer of bureaucracy that discourages some doctors from prescribing the medication they feel may be the best."

Furthermore, he said, it only stands to reason that a certain percentage of requests would be denied.

O'Rourke said it is worth "a little bit of extra bureaucracy" if it saves the state money.

"It's true — no doctor likes paperwork," he said. "But nobody likes big shortfalls either."

But adding more administrative work to an already onerous process might force some doctors to drop Medicaid patients, said Greenville psychiatrist Dr. Patrick B. Mullen.

"People are already having trouble finding doctors who will take them. If you add another layer of bureaucracy, it will further complicate things," he said, adding it would reduce time with patients as well.

O'Rourke said fewer doctors are accepting Medicaid patients because of the low reimbursement. If the state could save money through a preferred drug list and reimburse doctors more, it might be able to prevent the flight of physicians from Medicaid roles, he said.

About 850,000 people, or nearly one in four South Carolinians, are on Medicaid, which cost $4.2 billion this year, 30 percent of it in state funds and the rest in federal matching funds, said Bryan Kost, spokesman for the state Department of Health and Human Services, which oversees the program.

In 2000, that budget totaled $2.8 billion, he said.

Medicaid's drug budget is about $600 million a year, Kost said, $125 million of it in state funds.

Legislators have been looking for ways to save money in the program, such as tightening eligibility requirements.

But O'Rourke said drug costs are the only area of the program that he has found to be wasteful. For example, he said, Risperdal is far less costly than Zyprexa for treating schizophrenia.

A comparable 30-day supply of mid-strength Risperdal costs about $220 compared with $480 for Zyprexa, according to The Medicine Shoppe in Greer.

"If we can reduce waste in this area," O'Rourke said, "maybe there would be better funding for Medicaid patients."

Acknowledging that preferred drug lists have worked well for other conditions, state Rep. Rex Rice, a member of the House Ways and Means Health Care Subcommittee, has proposed that the state adopt a voluntary program for mental health drugs this year that encourages doctors to prescribe from a preferred drug list.

"Let's cautiously move into it," said Rice, R-Greenville, "so we can make an informed decision next year when the budget comes around."

Kost said about $9.3 million — $2.8 million of it in state funds — could be saved if the carve-out for mental health drugs was revoked.

Noting that the Legislature is only at the beginning of the budget process, Kost said a voluntary preferred drug list is a reasonable compromise.

"The agency is committed to running the best program for the state for the health of the people involved and the bottom line," he said. "It's a reasonable solution to a complex situation."

Almeida said he supports that idea too, particularly since the state has been cutting back on mental health services.

"We hope that a doctor will, if he's looking at two medications and believes either would work just as well, encourage the less expensive medicine," he said.

"But we want them to have the flexibility to make that decision. We feel it's critical that people have access to these medications, especially in this environment."

And Mullen, who agreed that psychiatric drugs are far too costly, fears a preferred drug list might disrupt a patient's treatment, particularly after a hospitalization.

"A week later, he could be back in the hospital," he said. "What costs most?"

O'Rourke said a voluntary list maintains the status quo and doesn't help lower costs. If a pharmaceutical company knows its drug is protected from prior authorization, he said, it knows it doesn't have to give the state a discount.

"I recognize that people who take care of family members, children and friends with mental illness worry about access to their drugs," O'Rourke said. "But they should know there is a professional mechanism (the Pharmaceutical and Therapeutics Committee) for any problems to be addressed."

The American Cancer Society doesn't support limiting drugs for cancer patients either, spokeswoman M.J. Wardle said.

"The American Cancer Society feels that cancer patients ought to have the best drugs available to them as determined by their doctors," she said. "Therefore we would support a waiver for cancer drugs."

Sanford has supported the idea of a preferred drug list since 2003, but he will give full consideration to those arguing for and against it, spokesman Will Folks said.

"We are monitoring this as it moves through the process," he said, "and we're interested in hearing the Legislature's reasoning for keeping the carve-outs."

Rice said he will float the idea of a voluntary preferred drug list to the full Ways and Means Committee in about two weeks.