Status Report: Medicaid Preferred Drug List Program

Presentation to the:

Joint Commission on Health Care

Behavioral Health Subcommittee

Patrick W. Finnerty, DirectorDepartment of Medical Assistance Services

August 4, 2004Richmond, Virginia

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Presentation Outline

Background of PDL Development

Current Status

Review of Antidepressants

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2003 Appropriations Act Required DMAS to Implement A PDL

Item 325(ZZ.1) of the 2003 Appropriations Act directed DMAS to:– Implement PDL program no later than Jan. 1, 2004– Seek input from physicians, pharmacists, pharmaceutical

manufacturers, patient advocates, and others– Form a Pharmacy & Therapeutics (P&T) Committee– Ensure drugs on the PDL are safe and clinically effective

before considering cost effectiveness– Include several key provisions: 72-hour emergency supply;

24-hour prior authorization process; expedited review of denials; and consumer/provider training and education

– Report to General Assembly on main design components

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What is a PreferredDrug List (PDL) Program?

PDL is a prior authorization program that divides Medicaid covered prescription drugs into two categories:– (1) Those that are available with no prior authorization,

known as “preferred” drugs that are selected based on safety and clinical efficacy first, then on cost-effectiveness.

– (2) Those that are available with prior authorization, known as “nonpreferred” drugs.

Virginia Medicaid’s PDL applies only to the fee-for-service program; MCOs have their own PDLs or formularies

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Pharmacy & Therapeutics Committee

Member Background Randy Axelrod (MD) (Chairman) Anthem Chief Medical Officer Roy Beveridge (MD) Oncologist/Patient

Advocate Avtar Dhillon (MD) Psychiatrist (CSB) James Reinhard (MD) Psychiatrist (DMHMRSAS) Arthur Garson, Jr (MD) Dean, UVA Med. School Mariann Johnson (MD) Family Practice Eleanor (Sue) Cantrell (MD) Local Health District

Director Christine Tully (MD) Geriatrician, VCU/MCV Mark Szalwinski (Pharmacist) Sentara Health Care

(Vice Chairman) Gill Abernathy (Pharmacist) INOVA Health System Mark Oley (Pharmacist) Westwood Pharmacy Renita Warren (Pharmacist) Edloe’s Pharmacies

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PDL Development Process

All Therapeutic Classes of Drugs

P&T Committee Reviews Certain Drug Classes For Possible Inclusion in PDL

For Those Classes Included in PDL, P&T Committee Recommends Drugs That Are Preferred/Non-Preferred

Based on Clinical Efficacy First

Preferred Drugs

NO PDL PA Required

Non-Preferred Drugs

Drug requires PA

Cost Consideration

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Key Classes of Drugs Excluded from the PDL Program

Therapeutic Class Description Used in the Treatment of

Insulins Diabetes

Cholinesterase Inhibitors Alzheimers

Platelet Aggregation Inhibitors Clotting Disorders

Antivirals for HIV HIV/AIDS

Cancer Chemo. Agents Cancer

Anti-convulsants Seizure Disorders, Mental Health

Immunosupressants Transplant rejections, Arthritis

Antiemetics Nausea in cancer patients, Aging

Anti-psychotics, Atypical and Typicals

Serious Mental Illness

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13 Drug Classes Were Included in the PDL Program for January 2004

Therapeutic Class Description Proton Pump Inhibitors (PPIs)

H2 Antagonists

Nasal Steroids

Second Generation Antihistamines

Selective Cox-2 Inhibitors

HMG CoA Reductase Inhibitors (Statins)

Sedative Hypnotics

Beta Adrenergics

Inhaled Corticosteroids

ACE Inhibitors

Angiotensin II Receptor Blockers (ARBs)

Calcium Channel Blockers (CCBs)

Beta Blockers

Used in the Treatment of: Gastrointestinal Disorders

Gastrointestinal Disorders

Allergies, Asthma, Other Respiratory Illness

Allergic Conditions

Inflammatory Conditions

High Cholesterol and Dyslipidemia

Insomnia

Asthma and Other Respiratory Illness

Asthma and Other Respiratory Illness

Hypertension/Other Cardiovascular Illness

Hypertension/Other Cardiovascular Illness

Hypertension/Other Cardiovascular Illness

Hypertension/Other Cardiovascular Illness

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Drug Classes Added to PDL Program in April 2004

Therapeutic Class Description

Oral Hypoglycemics

Leukotriene Modifiers

Bisphosphonates

Traditional NSAIDs

Serotonin Receptor Agonists

Oral Antifungals

Used in The Treatment of:

Diabetes

Allergic Conditions/Asthma

Osteoporosis

Inflammatory Conditions

Migraine Headache

Nail Fungal Infections

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Drug Classes Added to PDL Program in July 2004

Therapeutic Class Description

Carbonic Anhydrase Inhibitors

Alpha 2 Adrenergics

Beta-blockers

Prostaglandin Inhibitors

Antihyperkinesis/CNS Stimulants

Macrolides - Adult

Macrolides - Pediatrics

2nd Generation Quinolones - Systemic

3rd Generation Quinolones - Systemic

2nd Generation Cephalosporins

3rd Generation Cephalosporins

Used in the Treatment of:

Ophthalmic

Ophthalmic

Ophthalmic

Ophthalmic

ADD/ADHD

Antibiotics

Antibiotics

Antibiotics

Antibiotics

Antibiotics

Antibiotics

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Critical Steps Taken in Implementation Process

Met with more than 40 interested parties to solicit input into design of PDL program.

Formed PDL Implementation Advisory Group

Provided broad access to all PDL information through dedicated web site (www.dmas.virginia.gov) and e-mail (pdlinput@dmas.virginia.gov)

Conducted extensive beta-site testing with independent, chain and long-term care pharmacies.

Phased-in drug classes – “soft edits” for a period, then “hard edits”

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Critical Steps Taken in Implementation Process

Developed an extensive education program– Memorandum and reminder postcard sent to providers– Information (English & Spanish) sent to all recipients– Regional and targeted training programs for

pharmacists, health systems, and provider associations– Personal contact made with high volume Medicaid

prescribers and pharmacists

Effective September 1, providers can download the PDL to their handheld personal assistants through eProcates

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Presentation Outline

Background of PDL Development

Current Status

Review of Antidepressants

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Implementation Has Gone Very Smoothly

All clinical decisions regarding the PDL and prior authorization process are made by DMAS’ Pharmacy and Therapeutics (P&T) Committee.

PDL compliance rate is high and most changes to “preferred” drugs are being made voluntarily

Patients are getting the drugs they need– There have been 26 “technical” denials but in these cases,

the patients still received their drugs– There have been no appeals – 7 of every 10 requests for a PA are approved; in other

cases, provider agrees to switch to the preferred drug

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Implementation Has Gone Very Smoothly

Call Center is operating extremely well

Very few complaints from providers or clients

In terms of savings, actual Medicaid expenditures are significantly below DMAS’ official forecast. Preliminary savings analysis indicates DMAS is on pace to meet its required savings

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Compliance Is High; Rates Do Not Vary Greatly By Drug Class

89% 89% 92%

84%

93% 93%

83%

90%

TotalGastrointestinal

Medications LipotropicsAnti-

HistaminesHypotensive

ACE BlockersHypotensive

ReceptorsAnti-

InflammatoryBeta

Blockers

85% Compliance Level Needed For Budgeted Savings

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First Health Call Center Staff Are Answering Calls In Less Than 30

Seconds

0:16

2:46

Average Speed to Answer

Average Length of Call

Average

January February May

0:30

2:39

March April

0:00:00

0:28:48

0:57:36

1:26:24

1:55:12

2:24:00

2:52:48

3:21:36

3:50:24

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DMAS Will Conduct A Comprehensive Evaluation of PDL Program

Evaluation will address the following key issues:

– Has the PDL program been implemented in a way to ensure a high rate of compliance without adversely affecting patient access/care?

– What impact has the PDL program had on Medicaid pharmaceutical spending?

– Has the PDL program impacted patient health outcomes for Medicaid clients?

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Presentation Outline

Background of PDL Development

Current Status

Review of Antidepressants

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Antidepressants (SSRIs) & Antianxiety Drugs

Medicaid spent approximately $29.5 million in total funds (net of rebates) on SSRIs ($15.8), anti-anxiety drugs ($6.9), and new generation antidepressants ($6.8) in FY 2003

The SSRI drug class is the third highest in expenditures

Excluding the SSRIs, anti-anxiety drugs and new generation antidepressants from the PDL would cost approximately $5 million (total funds) annually; a “grandfather” provision would cost roughly half of this amount

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2004 Appropriations Act Provides Direction on Review of

Antidepressants Item 326 BB 7

– If DMAS does not exempt antidepressants and antianxiety medications used for the treatment of mental illness from the PDL, it should defer inclusion from PDL until July 1, 2005

– Prior to including these drug classes in the PDL, DMAS shall provide a plan that stipulates mechanisms to: minimize adverse impacts on consumers; ensure appropriate provider education; and ensure inclusion is evidence-based, clinically efficacious and cost-effective

– DMAS shall report such plan to the Governor, and Chairman of the House Appropriations and Senate Finance Committees and the Joint Commission on Health Care by January 1, 2005

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DMAS/P&T Committee Approach

Antidepressants and antianxiety drug classes will be reviewed by the P&T Committee on October 6, 2004

In addition to receiving testimony on scientific evidence from manufacturers, clinicians and others, the P&T Committee also will receive public comments from other interested parties

If the P&T Committee recommends including these drug classes in the PDL, a report will be prepared and submitted as required by the 2004 Appropriations Act.– If recommended for inclusion in the PDL, the effective

date would be no earlier than July 1, 2005