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Pharmacy and Therapeutics Committee Meeting
Testimony
September 13, 2006

James W. Jordan, Executive Director

Given the state’s budget crisis with rising health care costs, it may be tempting to limit access to medications for people with mental illness to save money. However this is not the best way to create an effective, efficient mental health system for those on Medicaid in Pennsylvania

• Open access results in best treatment outcome. Open access to the full range of medications for people with mental illness is critically important for achieving the best possible treatment outcome for patients as quickly as possible, which leads to the most cost-effective outcome.
• Carve-outs are necessary with PDL’s. Almost every state that has enacted a Preferred Drug List (PDL) in Medicaid fee-for- service has provided some type of mental health carve-out (written and verbal)
• Psychotropics are not interchangeable. Unlike many medications that treat other illnesses, medications that treat mental illness can’t be used interchangeably. The side effects of these medications can be extremely serious, and vary with each patient. The worse the side effects, the less likely a patient will be able to stay on treatment
• Patient prescription adherence poorer. Because patients are less likely to adhere to treatment on medications that are not best for them, they are more likely to suffer a serious episode.
• Higher costs associated with episodic relapse. Each episode results in immediate, short-term additional costs to the Medicaid budget through emergency department treatment, inpatient hospitalization and crisis services.
• Medication changes drive higher cost. Patients who switch antidepressants remain in treatment 50% longer and cost approximately 50% more to treat in a more costly treatment setting. In terms of cost containment, formulary restrictions are far more likely to have the opposite effect. (Department of Psychiatry, School of Medicine, University of New Mexico Health Sciences Center, Albuquerque 87131-5456, USA)
• Denial of medications has higher cost systems ripple effect. Both shorter and longer-term costs to the state budget outside Medicaid will also increase if patients are denied needed medications, including increased incarceration and increased homelessness.
• Medications are treatment and cost effective. Medications are both effective (they result in good treatment outcomes for people with mental illness) and cost effective (they save money over alternative forms of care for people with mental illness). Unlike the rest of healthcare, medications comprise only 3% of costs for mental illnesses—and some experts contend that they may be responsible for more than 50% of positive treatment outcomes. (M Graham, “Restrictive Formularies, “National Mental Health Association, Department of Healthcare Reform)
• Treatment Works. According to the National Institutes of Health (NIH), over 80 percent of people with mental illness can get better with treatment. The U.S. Surgeon General said that people with mental illness who receive appropriate treatment can experience a significant reduction in symptoms and can live, learn and work in the family and in the community.
NEW POINTS (since September 2005 Testimony)
• STAR*D2 NIMH Research on Formularies. The importance of switching or adding different medications underscores the importance of preserving broad access to a range of medications. Governors and state legislatures must now reconsider restricted formularies in Medicaid programs. Employers should review restrictions under managed care plans. Limiting choices to only two or three antidepressants will condemn too many individuals to life-threatening illness. (NAMI E-News March 2006, STAR*D2 is part of a "Big Four" research series into the effectiveness of treatment of major depression, bipolar disorder, adolescent depression and schizophrenia, funded by NIMH.)
• Massachusetts polypharmacy initiative. Polypharmacy educations programs that are aimed at reducing the over prescribing of medications; (NAMI Policy Research Institute March 2003 Prior Authorization Threatens Consumers' Health)
Excerpt from: American Psychiatric Association
Managed Care: Using a Clinical and Evidence-Based Strategy to Preserve Access to Psychiatric Medications
Ken Duckworth, M.D. and Annette Hanson, M.D., M.B.A.
“We have chosen to focus our efforts on three proliferating polypharmacy practices for which there is limited or no evidence base: routine and concomitant use of more than one atypical antipsychotic for more than a reasonable crossover period (60 days), use of two selective serotonin reuptake inhibitors for more than 60 days, and concomitant use of five or more psychotropic medications (1).
In our dual roles as clinicians committed to individual patients and stewards of public resources (2), we are seeking cost containment strategies guided by clinical wisdom and an ethical framework to avoid the more draconian and less clinically and ethically guided alternatives (3).”
• NAMI Opposes Pharmaceutical Pricing Practices that make new medications unaffordable. (NAMI Policy Research Institute, March 2003, Prior Authorization Threatens Consumers' Health)
OTHER STATES’ EXPERIENCES
• New Hampshire: As a result of every dollar saved by reducing the budget on medication for patients in Medicaid with Schizophrenia, $17 was spent on emergency services to those patients as a consequence
• California: Forcing people with mental illnesses to switch to cheaper medications cost the state $6,000 to $8,000 additional dollars per patient due to increased hospitalizations.
• Louisiana: Restricting access to medications through drug formularies increased Louisiana’s Medicaid cost by 4.1 percent.
• Florida: A year’s worth of medications averages $3,800 versus an average of $950 a day for hospitalizations.

NEW INFORMATION FROM OTHER STATES (since 2005)
• Iowa Joins Drug-Purchasing Pool. Iowa has joined with Maine and Vermont in a purchasing pool with hopes of negotiating lower prices for prescription drugs. As part of the pool, each state maintains the ability to establish which drugs are eligible for coverage in the state's Medicaid program. Iowa officials have pledged to return any savings from the purchasing pool back into the Medicaid program. DesMoinesRegister.com, August 3, 2006
• Kentucky Uses DRA Provisions to Revamp Medicaid Plan. Kentucky received approval for a Medicaid plan that provides different benefits based upon individual health problems, rather than a one-size-fits-all approach. Depending upon individual plans and income levels, some participants will be required to pay co-pays for some procedures. Officials believe the plan will limit participants' visits to emergency rooms and cut unnecessary prescriptions. http://www.mkyt.com May 5, 2006
• New Mexico Interagency Behavioral Health Purchasing Collaborative to reduce costs of drug purchases. http://aging.senate.gov/public/_files/hr144ph.pdf
Excerpt from TESTIMONY OF PAMELA S. HYDE, J.D.
SECRETARY, NEW MEXICO HUMAN SERVICES DEPARTMENT to SENATE SPECIAL COMMITTEE ON AGING JUNE 28, 2005:
“…our state’s innovative approach to behavioral health services financing and service delivery. New Mexico’s Interagency Behavioral Health Purchasing Collaborative brings together 15 agencies to jointly purchase services for persons with mental health and substance abuse service needs, using multiple fund sources (including Medicaid, federal block grants, state general funds, child welfare funding, and other state and local funds). This joint purchase will be through one vendor to create a single and consistent statewide behavioral health delivery system throughout New Mexico. We are in the process of transitioning to that vendor multiple types of funds from six of those state agencies beginning July 1, 2005.”

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