Testimony Before The Senate Human Services Committee
Judy Lee, Chairman
SB 2284 - Medicaid preferred drug list
January 24, 2005
Chairman Lee, members of the committee, I am Dr. Brendan Joyce, Administrator of Pharmacy Services for the Department of Human Services. I appear to provide testimony regarding SB 2284.
As this is a bill that seeks to have the Department implement a preferred drug list (PDL), and a preferred drug list exists in concert with a prior authorization program, it would be imperative that section 50-24.6-04 not be repealed, or at a minimum, language is added to SB 2284 specifically authorizing and guiding the department in the prior authorization process that must accompany the PDL. Also, by retaining prior authorization language, if PDL’s fall out of favor once Medicare Part D is implemented, the Department would still be able to pursue efficiencies through prior authorization.
Section 5, 1.e. includes language for a physician to include on a prescription to bypass any PDL enforcement (presumably prior authorization). Oregon is the only state that I am aware of that has utilized this process, and according to information I received from Oregon, their savings with this process was 75% less than what other states achieved with their PDL’s. This process only lasted for a short period of time in Oregon, as they are now the only state that I am aware of that has a PDL but does not enforce it with any prior authorization.
Section 5.2 includes language to exempt mental health drugs from any PDL. As a reminder, mental health drugs account for roughly 50% of our drug spend. Also, exemptions from PDL’s are a slippery slope and it is difficult to define exactly what should be exempted. Overall, most states trust the practicing physicians and pharmacists on the DUR Board to make the appropriate decision. Also in section 5.2, the Department is instructed to continue the psychiatric pharmacy program. Currently, Eli Lilly is funding the program. Once the funding ends, the Department would have to take over funding at a cost of $256,440 per year (current costs). As this program is a focused retro-Drug Utilization Review (DUR) program, and CMS is already contributing funding to our existing retro-DUR program, I am unsure as to their ability to fund two programs in one state. Currently, there is no other state that is funding the program without assistance from a pharmaceutical company.
I would be happy to answer any questions you may have.