IMS sees little drug spending impact from shift to managed Medicaid plans

States have been moving their Medicaid patients to managed healthcare plans, believing the extra control will help keep a lid on the healthcare spending pressure cooker, including for prescription drugs. In the 9 months ending last June, the number of prescriptions paid under managed care plans grew to 12.5 million per month from 4.9 million per month and accounted for 46% of all drugs paid for in Medicaid.

So what does this wholesale shift mean for drug companies? According to a just-released report from the IMS Institute the jury is still out on that question. "We have called out what we have seen, and it wasn't a lot," said Murray Aitken, executive director of the IMS Institute. But certainly there is more to come. "We felt there is nothing really out there taking a look at on whether this big shift in the Medicaid population is having an impact, so we are putting out a small report. We think it is timely and of interest to those covering Medicaid."

Drugmakers are intensely interested in how states manage their Medicaid programs and how many expand them with incentives from the Patient Protection and Affordable Care Act. Pharma negotiated fees and rebates back in 2009 as part of the law expecting to come out ahead as more people are insured.

To provide some insight, the IMS Institute independently looked at the use of antipsychotics and respiratory and diabetes drugs in four states--Kentucky, New Jersey, New York and Ohio--comparing how they were prescribed under Medicaid fee-for-service plans and Medicaid managed healthcare plans. What they found was that regional variations in the way healthcare, and drugs, are prescribed created some changes within states but not so much across state lines. There was one exception in the use of generic antipsychotic drugs. IMS noted that generic utilization rates were 3% to 14% higher in the managed care plans.

Other findings reflected long-standing differences in the ways the programs are structured, Aitken said. In New Jersey, the average use of antipsychotics for patients in fee-for-service plans is 40% lower than in the other three states studied while the use there of respiratory medicines by patients in managed Medicaid plans was 40% higher. New York focused on diabetes. Patients moved to managed care plans received 5% more prescriptions for various diabetes disorders, including a 13% higher rate of use of metformin, compared to those in fees for service plans. Kentucky saw a difference in the use of respiratory drugs. There, the average number of prescriptions for respiratory conditions was 5% higher in the managed care group.

Aitkin said IMS will continue to the study through this year to establish a baseline. "These changes occurred recently and it may be another year or two before we see the real impact," he said.

But with the expansion next year of Medicaid under the Affordable Care Act, he said everyone that has a stake in Medicaid needs to see how it plays out. "Drug companies should be interested and states and taxpayers should be interested and beneficiaries should be interested in whether these changes are having the intended impact," Aitken said. "We don't have the answer, but we are trying to lay out what we can see so far." 

- find a link to the report here