ATLANTA -- The state spent almost $6 million in one recent year
to fill 371,000 prescriptions for Medicaid patients'
Then, suspicious auditors put the drugs under "prior approval,"
meaning the doctor needed to phone or fax Medicaid reviewers
before the state would pay for the prescription.
Five years later, spending was down to $296,000 for just 21,478
prescriptions. That's a 95 percent savings, even as Medicaid was
growing to cover 400,000 more people.
"It just plummeted, appropriately," said Charles Callahan,
executive director of the Georgia Pharmacy Foundation, who noted
that the class of drugs included Valium, Xanax and other widely
"The percentage of Medicaid recipients on these drugs compared
with privately insured or cash patients was very alarming,"
Callahan said. "When they are over-prescribed and over-utilized,
you basically don't want to get out of bed."
Callahan's group is paid $1 million a year by Medicaid to
review requests for 100 drugs that are considered high-cost,
experimental or prone to improper use.
But Medicaid would lose that authority under a bill that has
passed the Senate overwhelmingly and awaits action in the House.
The measure by Sen. Nadine Thomas, D-Atlanta, would require
Medicaid to pay for any federally approved drug regardless of
It has the support of influential drug companies from across
the country, which are looking to Georgia as a battleground
because its list of drugs requiring prior approval is the
The bill also would prevent Medicaid from insisting on generic
drugs instead of higherpriced but medically equivalent brand
names. Instead, the judgment would be left up to individual
State auditors estimate the bill could explode Medicaid costs
by $50 million a year.
Thomas and the drug industry say that figure is misleading,
because it doesn't account for money Medicaid might spend if
people who are denied drugs become sicker.
"The bottom line is, you are denying access to people. What
it's saying is, poor people and senior citizens do not deserve
quality care," said Thomas, a registered nurse.
Medicaid, which spends $310 million a year on drugs, has
contracted with Georgia pharmacists to screen prescription
requests since 1991.
But two events in 1996 set off a political firestorm that made
the pre-approval program suddenly controversial.
One was the move in November to put mood-altering drugs on the
prior approval list. The decision was made after a potent new
anti-psychotic drug, Risperdal, came on the market in 1994 and
within one year became a $5 million-a-year Medicaid expense.
"We were seeing prescriptions for kids as young as 22 months.
They were prescribing it for bed wetting, anxiety, everything,"
said Marjorie Smith, the state's Medicaid commissioner.
That mobilized drug manufacturers and mental health advocates,
who came forward with horror stories about children driven into
the hospital when their urgently needed Risperdal was turned
Physicians complained of administrative glitches when their
Medicaid approval forms were faxed back "rejected" for a small
omission, forcing patients to wait hours or even days to learn
if their drugs would be covered.
Smith and Callahan say the complaints exposed legitimate
administrative problems, which can be fixed without repealing
the entire drug review process. …