In 2001, Georgia Medicaid faced a potential budget shortfall because of costs associated with the increased use of PPIs (brand drugs that treat acute upper-gastrointestinal conditions, such as ulcers and esophagitis). PPIs accounted for 5.6%, or $45.5 million, of the program's pharmacy costs and ranked first in costs among all prescription-drug classes.
An annual budget review revealed that enrollees were using PPIs for a variety of conditions that did not appear to warrant PPI use, leading to higher than normal drug costs. For these patients, a possible alternate treatment existed in lower-cost generic histamine type-2 antagonists (H2As), such as Zantac®.
After considering these factors, Georgia implemented the prior-authorization program in February 2002, requiring enrollees to obtain approval before receiving a PPI at the pharmacy.
For the study, Express Scripts researchers examined more than 1.1 million ambulatory pharmacy reimbursement claims for the program's enrollees during the 12 months before and the 12 months after the implementation of the program.
After implementation of the prior-authorization program, the use of generics increased from 31% to 79%. The result was a net savings of $20.6 million, with PPI drug expenditures decreasing from $44.1 million to $13.2 million, and H2A drug expenditures increasing from $6 million to $13.5 million. In addition, the 12-month average per member per month (PMPM) net costs for PPIs and H2As combined declined from $3.4
Contact: Derrell Carter
Express Scripts, Inc.