March 9, 2005
By Linda Gorman
If Senate Bill 22 passes, who will protect the patients?
Will it be the unpaid, politically-appointed 14 member pharmacy and therapeutics committee, which was created to recommend “allowable” drugs for Colorado Medicaid patients? This committee is supposed to pick treatments based on effectiveness results. Results from randomized clinical trials, national guidelines, clinical results, costs and from the kickbacks that can be wrung from drug manufacturers. Setting aside the fact that randomized clinical trials take forever, are few in number and, for arcane statistical reasons, tend to find against new drugs, such complex selection criteria mean, that in practice this committee will pretty much do as it likes.
Politically appointed committees put government interests first.
The Colorado legislature is desperate to lower Medicaid costs and has no stomach for addressing the programs fundamental flaws. Supporters of SB-22 see a Band-Aid, a way to lower costs a little with few political repercussions. Better to reduce drug choice for the sick, it seems, than to even discuss whether the state should even be paying for drugs for erectile dysfunction and smoking cessation.
Will physicians protect the patients? Private physicians already lose money on Medicaid patients. Getting prior approval takes time. Last year the state tried and then abandoned a Medicaid prior approval program. Physicians treating Medicaid patients will likely take the path of least resistance, shrug, and limit their prescribing to the drugs chosen by the state.
There is no doubt that denying drugs will reduce Medicaid pharmacy costs. Legislators can even pretend that it will lower overall costs. The state accounting system does not measure whether decisions to restrict drugs will increase payments for labs, physicians, and hospitals.
Wyoming has a committee-run Medicaid PDL. As expected, its list contains more of the older, less expensive, medications with bigger side effects. In a recent study of Puerto Rico Medicaid claims, economist Frank Lichtenberg found that a drugs age was positively correlated with mortality. Puerto Rico Medicaid uses far fewer drugs developed after 1980 than U.S. Medicaid. Lichtenberg estimates that Puerto Ricos Medicaid mortality would have been 5.3 percent lower had its patients had access to more modern drugs.
Some states legislating prescription drug lists, have made an effort to monitor their effect on patient welfare by requiring independent evaluations of their PDL programs. Supporters of SB-22 did not see fit to require even so elementary a safeguard.
Safeguards matter, because the evidence suggests that financially motivated drug denials can harm patients and can increase overall costs. In Canada, provincial committees have controlled drug access for decades. Sally Pipes, author of Miracle Cure, How to Solve Americas Health Care Crisis and Why Canada Isnt the Problem, observes that this drug denial shifts the costs to the patients. In 1998 and 1999, Canadas federal government approved 99 drugs for sale in Canada. The province of Ontario, which took about 500 days to approve a new drug, decided to pay for only 25 of them. Many Canadians drive to the U.S. for medical care so that they have access to decent drugs. An August 2000 study found that the best way to reduce waiting times for surgery [in Canada] would be for the government to spend more money on drugs.
Like Canadas provincial governments, SB-22 supporters want lower drug budgets. They know that patient groups with political clout will fight measures arbitrarily limiting drug choice. Even though drugs to treat AIDS/HIV and severe mental illness are fast growing expenditure categories currently accounting for almost 16 percent of Colorados Medicaid pharmacy spending, SB-22 sponsors cynically exempted these drugs from its controls.
People afflicted with HIV/AIDS or severe mental illness are protected by well organized lobbying groups willing to wage political war for drug access. As in Canada, the costs of limited drug choice will be shifted to patients, specifically those lacking political power and suffering from less celebrated conditions like heart disease, epilepsy, asthma, and multiple sclerosis.
How much will a prescription drug list save? Colorado Medicaid already requires generic substitution for all drugs other than those for severe mental illness, cancer, and epilepsy. It requires prior approval for some brand name drugs used to treat HIV, and for drugs likely to be misused. According to the Colorado Department of Health Care Policy and Financing, it is not possible to predict whether a preferred drug list would generate savings after the implementation of Medicare Part D on January 1, 2006.
The Colorado Legislative Staff claims savings of $347,083 a year for SB-22, assuming that Colorado will be like Michigan. This is a fragile estimate. In Michigan, even the severely mentally ill are limited in their choice of drugs. If drug denials produce even slight upticks in labs, physician visits, or hospital admissions, SB-22 could end up doing more harm than good.