Medicaid to save billions as antipsychotic drug patents expire

Medicaid will likely save billions of dollars each year when patents for five antipsychotic medications expire, allowing the state-federal health insurance program to offer generic versions for its members, according to a study published in the journal Psychiatric Services.

The insurance industry has been battling drug makers over pricey specialty medications for months now. As drug costs continue to rise, insurers are working to implement innovative strategies to offset those increased prices, while still helping their members gain access to important treatments, FierceHealthPayer has reported.

Annual payments for antipsychotic drugs could decrease by $1.8 billion by next year--an almost 50 percent drop. And by 2019, costs should go down by $2.8 billion, or 76 percent.

"Mental health medications are among the most prescribed drugs in Medicaid, and many of these medications have recently become available as generics or soon will be," Eric Slade, author and associate professor at the University of Maryland, Baltimore Department of Psychiatry, said in a statement. "Our predictions suggest that this change will result in a substantial financial windfall to states and to the federal government."

The five medications--aripiprazole (Abilify), quetiapine (Seroquel), olanzapine (Zyprexa), ziprasidone (Geodon) and paliperidone (Invega)--currently account for $3.3 billion (90 percent) of Medicaid's total spending on antipsychotic drugs. And Medicaid is the country's largest payer for these medications, accounting for to 80 percent of all antipsychotic prescriptions.

Because it will be less expensive for Medicaid to cover these drugs, it might be easier for people with mental health conditions to access them. That's because many states implemented restrictions on how Medicaid can pay for second-generation antipsychotics, including requiring a doctor to obtain prior authorization before writing a prescription, limiting how many prescriptions a patient can fill per month and requiring patients to try certain antipsychotics before others.

"These findings have the potential to improve the lives of people suffering from schizophrenia and other mental disorders," said Bankole Johnson, chairman of the University of Maryland School of Medicine Psychiatry Department.

To learn more:
- here's the study and statement


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