NC News: State Restricts Medicaid Drugs-N&O Reports

Here is an article regarding the new Medicaid drug rules that went into effect. This change is part of several major changes in the current budget aimed at reducing costs. The question is if a person is on a medication that is not on the list will the cost of retaining that persons current physical or mental health exceed the savings of implementing this list?

State Restricts Medicaid Drugs
by Lynne Bonner

The state will cut prescription drug costs in Medicaid by limiting patients to mostly generics or brand names for which the state gets a rebate.

Serious shortfalls in the Medicaid budget have pushed the state to adopt limits similar to those used by more than 40 states and major insurers such as Blue Cross and Blue Shield. The change is expected to yield about $90 million a year in savings, with the state's share reaching $23 million to $30 million. The federal government pays most Medicaid costs.

The move comes after years of elected leaders' resisting limits on drugs under pressure from the pharmaceutical industry. Until recently, lawmakers refused to allow a preferred drug list. Drug companies, which employ thousands of state residents, have contributed generously to legislators' campaigns.

"I think we've been very sensitive to this issue mainly because the drug industry is such a large employer in North Carolina," said Sen. Bill Purcell, a Laurinburg Democrat and a retired physician who helped write the state's health budget.

"I think in an ideal world, you won't do this," he said of establishing a preferred drug list. "It's better than some other things we can do."

Advocates for people with mental illnesses fought the change, saying that moving people off medications could lead to more hospitalizations.

Legislators looked to voluntary methods to nudge doctors into prescribing less expensive medicines to trim a Medicaid drug bill that tops $1 billion a year. Medicaid, the government health insurance for the poor and disabled, is the fastest-growing item in the state budget.

Last year, pressed by rising costs and the financial crisis, the legislature left a safety valve in the budget for the state Department of Health and Human Services. If the department could not show by June 1, 2010, that it was saving $25 million on prescriptions, the DHHS could institute a preferred drug list.

Read more at the N&O