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Mild utilization and prior authorization requests not enough to gain preferred drug list status

Medicare & Reimbursement Advisor Weekly, December 4, 2009

The following is a brief lesson about the intricacies of Medicaid’s formulary committee process, use of data, and consideration of anecdotal feedback.

Donnie Battie, MD, a member of Loui- siana’s pharmacy and therapeutics committee, had recently received a number of requests from outside groups to reconsider placing the antibiotic Omnicef on the PDL for Medicaid patients. Battie raised the issue during a committee meeting earlier this year, although Omnicef’s drug class was not being reviewed. The committee allowed a brief discussion.

There has been significant switching from Omnicef to the PDL-covered options—about a 75% rate, said Kris Rawlings, PharmD, a representative of Provider Synergies, the company owned by Coventry Health Care. The switching has been on target with the committee’s savings expectation for this therapeutic class. There had been some utilization of Omnicef, suggesting that providers were seeking prior authorizations and getting them. The drug will be not be reconsidered for the PDL until the next class review.

Net spend and supplemental rebates

Coventry Health Care recently acquired Provider Synergies and First Health, making it the leading player, by far, in state Medicaid. If a therapeutic category has a net spend that shows up on Provider Synergies’ radar, it will demand a supplemental rebate from the pharmaceutical manufacturer. The weight of the category is assessed by total prescriptions and total spending.

If a category has dominant generic presence, then the risk is not as big of a deal, in which case, Provider Synergies will try to shift to the generic. Categories with solid brand presence are hot targets for supplementals.

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