Medicaid-prescription amendment.

05LSO-0175.L1

                                                         

 

FISCAL NOTE

 

CORRECTED COPY

 

[Note:  This fiscal impact identifies the maximum expenditure increase, assuming all anticipated PD/PDL initiatives would be avoided by physicians.  If one were to assume only a portion of the prior authorizations would be impacted, the expenditure increase would be proportionately reduced.]

 

	FY 2006	FY 2007	FY 2008
NON-ADMINISTRATIVE IMPACT
Anticipated Expenditure Increase:
FEDERAL FUNDS	2,000,000	1,400,000	1,400,000
GENERAL FUND	1,700,000	1,200,000	1,200,000

Source of Expenditure Increase:  This bill would allow providers to bypass prior authorization (PA) and preferred drug list (PDL) programs currently in place.

 

This legislation would also not allow the Department of Health to limit payment of brand name medications when a generic is available.  Projected savings from this policy is approximately $960,000 per year.

 

Assumptions:

PDL/PA increased costs assume:

ü      75 percent conversion to preferred medications and

ü      100 percent of the conversion would be lost.

 

The following classes are currently on the PDL:  Statins ($50,000); Proton Pump Inhibitors ($350,000); ACE Inhibitors ($50,000); and NSAIDs ($90,000).

 

The following classes will be added to PDL in early 2005:  Calcium Channel Blockers ($60,000); Skeletal Muscle Relaxants ($70,000); Long-acting opioids ($210,000); and non-sedating antihistamines ($210,000).

 

The following classes will be added to PDL later in 2005:  Urinary Incontinence drugs ($130,000); Anti-depressants ($170,000); and Anti-epileptics (for pain and mood disorders) ($290,000).

 

The increased expenditures when generics are available are based upon actual FY04 data for prescribers who are writing and requiring brand name prescriptions when a less expensive generic is available.  Prescribers are currently able to do this by writing "Brand Medically Necessary" on the prescription.  Under this legislation, the Department's policy planned for January 2005, which would limit payment of brand name medications when a generic is available, would be rendered ineffective.

 

All expenditures are assumed to be funded 46 percent from general funds and 54 percent from federal Medicaid matching funds.

 

The anticipated savings from the PA and PDL programs, beginning in CY2006, are expected to decrease by approximately 46 percent, since the prescription drug costs for Medicare/Medicaid dual eligibles will be accounted for under a federal prescription drug program, with a state payback.  As a result, the state will forgo approximately 46 percent of the savings from the state PA and PDL cost containment measures.  The associated expenditure increases resulting from this legislation have also been reduced by a proportionate amount.

 

Prepared by:   Don Richards, LSO           Phone:   777-7881

(Background information provided by Roxanne Homar, Wyoming Department of Health phone:  777-6032.)