Cost Limits Drug Options for Public-Sector Patients

When Karren Johnson’s employer asked her to resign last year, she had stopped taking haloperidol (Haldol), divalproex (Depakote), and an antidepressant. The reason? Her supervisor had complained that her constant drowsiness was unprofessional, Johnson said.

Johnson, who lives near Albuquerque, N. M., explained to Psychiatric News, “I was taking 10 mg of Haldol because the newer atypical antipsychotics are not covered by my formulary. I was constantly struggling to stay awake at work and was sure my coworkers noticed my involuntary movements.”

Johnson, who was diagnosed with rapid-cycling bipolar disorder in 1999, added that she decided to stop all her medications thinking she could perform her job better. Instead, she became manic within 72 hours and eventually lost her job.

Like many other people with serious psychiatric illnesses, Johnson has a limited income and relies on health insurance that is funded by the state or county to cover her medication and therapy costs. But her health plan, University of New Mexico Cares, has a restricted drug formulary that covers only haloperidol (Haldol) and chlorpromazine (Thorazine), said Johnson. The alternative for her is to pay out of pocket for the newer antipsychotic drugs, which she can’t afford.

A week after losing her job, Johnson became suicidal and was hospitalized. Because she was no longer employed, Johnson qualified for a public assistance grant that paid for risperidone (Risperdal). “My symptoms improved, and I did not have the heavy drugged feeling,” said Johnson.

However, her grant expired when she took another job this year. She is now taking chlorpromazine because it is covered by the UMN Cares formulary.

“I’d rather take Risperdal, but I can’t afford to pay $270 out of pocket for a four-month supply,” said Johnson. Because chlorpromazine, paroxetine (Paxil), and lithium carbonate are covered by the formulary, Johnson pays monthly copayments of $8, $15, and $8, respectively, for those drugs.

Johnson has been hospitalized seven times since 1997, and the estimated total cost for her hospitalizations is more than $40,000.

The National Alliance for the Mentally Ill (NAMI) points out in a recent publication, “Access to Effective Medications,” that the initial increased costs of atypical antipsychotic medications are more than offset by the decreased costs of clinical care, especially hospitalization. NAMI refers to a recent study that shows that using the newer antipsychotic drugs produced net savings in the total cost of care of $8,702 per patient per year.

But many public and private health plans are looking solely at the increase in drug costs. According to IMS Health, a health care information company in Plymouth Meeting, Mass., total risperidone (Risperdal) sales in the U.S. rose from $542 million in 1996 to $1.3 billion last year. Olanzapine (Zyprexa) sales rose from $68 million to $19 billion in that same time.

Katrina Gay, NAMI’s director for regional operations, told Psychiatric News, “More physicians have been prescribing atypical antipsychotics in state hospitals and community mental health centers in the last five years. As a result, Medicaid spending on psychiatric drugs has increased 200 percent in some states, which has concerned Medicaid directors.”

Cost-Cutting Measures

Gay, who monitors state Medicaid drug-formulary proposals, added, “Because many states are strapped for cash, they are looking to restrict access to the newer drugs including requiring patients to fail first on older drugs, which can trigger relapse.”

Florida is a bellwether state, having last year enacted the first law in the nation to protect psychiatric and HIV drugs from formulary restrictions including prior authorization. But the law is being challenged.

Faye Barnette, executive director of the National Alliance for the Mentally Ill-Florida, told Psychiatric News that state Medicaid director Bob Sharpe has been under pressure to trim the budget. According to Jerry Wells, program manager of Florida Medicaid Pharmacy Services, psychiatric drugs make up about one-third of the total Medicaid budget, with antipsychotics representing the largest share.

Barnette said that Sharpe recently asked the pharmaceutical companies for a 25 percent rebate on psychiatric drugs, which they refused to give. The drug companies are already required to give a 15 percent rebate on drugs.

“Singling out psychiatric drugs for an additional rebate jeopardized access to psychiatric drugs for people on Medicaid. We campaigned against the rebate and met with the Medicaid director to persuade him to reconsider,” said Barnette.

Another attempt to undermine the Florida law has come from state legislator Ron Silver. He introduced a bill in March to remove the special exemption for psychiatric and HIV drugs in the 2000 law, making them subject to formulary restrictions and fail-first policies. At press time, Barnette said further action on the bill and rebate proposal had been postponed until a hearing could take place.

Kay commented, “It’s difficult for policymakers to grasp the difference the newer drugs make in enabling people with serious mental illnesses to live a meaningful life in the community.” ▪