1. Status Report: Medicaid Preferred Drug List Program
Presentation to the:
Joint Commission on Health Care
Behavioral Health Subcommittee
Patrick W. Finnerty, Director
Department of Medical Assistance Services
August 4, 2004
Richmond, Virginia

2. Presentation Outline Background of PDL Development Current Status
Review of Antidepressants

3. 2003 Appropriations Act Required DMAS to Implement A PDL
Item 325(ZZ.1) of the 2003 Appropriations Act directed DMAS to:
Implement PDL program no later than Jan. 1, 2004
Seek input from physicians, pharmacists, pharmaceutical manufacturers, patient advocates, and others
Form a Pharmacy & Therapeutics (P&T) Committee
Ensure drugs on the PDL are safe and clinically effective before considering cost effectiveness
Include several key provisions: 72-hour emergency supply; 24-hour prior authorization process; expedited review of denials; and consumer/provider training and education
Report to General Assembly on main design components

4. What is a Preferred Drug List (PDL) Program?
PDL is a prior authorization program that divides Medicaid covered prescription drugs into two categories:
(1) Those that are available with no prior authorization, known as “preferred” drugs that are selected based on safety and clinical efficacy first, then on cost-effectiveness.
(2) Those that are available with prior authorization, known as “nonpreferred” drugs.
Virginia Medicaid’s PDL applies only to the fee-for-service program; MCOs have their own PDLs or formularies

5. Pharmacy & Therapeutics Committee
Member Background
Randy Axelrod (MD) (Chairman) Anthem Chief Medical Officer
Roy Beveridge (MD) Oncologist/Patient Advocate
Avtar Dhillon (MD) Psychiatrist (CSB)
James Reinhard (MD) Psychiatrist (DMHMRSAS)
Arthur Garson, Jr (MD) Dean, UVA Med. School
Mariann Johnson (MD) Family Practice
Eleanor (Sue) Cantrell (MD) Local Health District Director
Christine Tully (MD) Geriatrician, VCU/MCV
Mark Szalwinski (Pharmacist) Sentara Health Care
(Vice Chairman)
Gill Abernathy (Pharmacist) INOVA Health System
Mark Oley (Pharmacist) Westwood Pharmacy
Renita Warren (Pharmacist) Edloe’s Pharmacies

6. PDL Development Process
All Therapeutic Classes of Drugs
P&T Committee Reviews Certain Drug Classes For Possible Inclusion in PDL
For Those Classes Included in PDL, P&T Committee Recommends Drugs That Are Preferred/Non-Preferred Based on Clinical Efficacy First
Preferred Drugs
NO PDL PA Required
Non-Preferred Drugs
Drug requires PA
Cost Consideration

7. Key Classes of Drugs Excluded from the PDL Program
Therapeutic Class Description
Used in the Treatment of
Insulins
Diabetes
Cholinesterase Inhibitors
Alzheimers
Platelet Aggregation Inhibitors
Clotting Disorders
Antivirals for HIV
HIV/AIDS
Cancer Chemo. Agents
Cancer
Anti-convulsants
Seizure Disorders, Mental Health
Immunosupressants
Transplant rejections, Arthritis
Antiemetics
Nausea in cancer patients, Aging
Anti-psychotics, Atypical and Typicals
Serious Mental Illness

8. 13 Drug Classes Were Included in the PDL Program for January 2004
Therapeutic Class Description
Proton Pump Inhibitors (PPIs)
H2 Antagonists
Nasal Steroids
Second Generation Antihistamines
Selective Cox-2 Inhibitors
HMG CoA Reductase Inhibitors (Statins)
Sedative Hypnotics
Beta Adrenergics
Inhaled Corticosteroids
ACE Inhibitors
Angiotensin II Receptor Blockers (ARBs)
Calcium Channel Blockers (CCBs)
Beta Blockers
Used in the Treatment of:
Gastrointestinal Disorders
Allergies, Asthma, Other Respiratory Illness
Allergic Conditions
Inflammatory Conditions
High Cholesterol and Dyslipidemia
Insomnia
Asthma and Other Respiratory Illness
Hypertension/Other Cardiovascular Illness

9. Drug Classes Added to PDL Program in April 2004
Therapeutic Class Description
Oral Hypoglycemics
Leukotriene Modifiers
Bisphosphonates
Traditional NSAIDs
Serotonin Receptor Agonists
Oral Antifungals
Used in The Treatment of:
Diabetes
Allergic Conditions/Asthma
Osteoporosis
Inflammatory Conditions
Migraine Headache
Nail Fungal Infections

10. Drug Classes Added to PDL Program in July 2004
Therapeutic Class Description
Carbonic Anhydrase Inhibitors
Alpha 2 Adrenergics
Beta-blockers
Prostaglandin Inhibitors
Antihyperkinesis/CNS Stimulants
Macrolides - Adult
Macrolides - Pediatrics
2nd Generation Quinolones - Systemic
3rd Generation Quinolones - Systemic
2nd Generation Cephalosporins
3rd Generation Cephalosporins
Used in the Treatment of:
Ophthalmic
ADD/ADHD
Antibiotics

11. Critical Steps Taken in Implementation Process
Met with more than 40 interested parties to solicit input into design of PDL program.
Formed PDL Implementation Advisory Group
Provided broad access to all PDL information through dedicated web site ( and
Conducted extensive beta-site testing with independent, chain and long-term care pharmacies.
Phased-in drug classes – “soft edits” for a period, then “hard edits”

12. Critical Steps Taken in Implementation Process
Developed an extensive education program
Memorandum and reminder postcard sent to providers
Information (English & Spanish) sent to all recipients
Regional and targeted training programs for pharmacists, health systems, and provider associations
Personal contact made with high volume Medicaid prescribers and pharmacists
Effective September 1, providers can download the PDL to their handheld personal assistants through eProcates

13. Presentation Outline Background of PDL Development Current Status
Review of Antidepressants

14. Implementation Has Gone Very Smoothly
All clinical decisions regarding the PDL and prior authorization process are made by DMAS’ Pharmacy and Therapeutics (P&T) Committee.
PDL compliance rate is high and most changes to “preferred” drugs are being made voluntarily
Patients are getting the drugs they need
There have been 26 “technical” denials but in these cases, the patients still received their drugs
There have been no appeals
7 of every 10 requests for a PA are approved; in other cases, provider agrees to switch to the preferred drug

15. Implementation Has Gone Very Smoothly
Call Center is operating extremely well
Very few complaints from providers or clients
In terms of savings, actual Medicaid expenditures are significantly below DMAS’ official forecast. Preliminary savings analysis indicates DMAS is on pace to meet its required savings

16. Compliance Is High; Rates Do Not Vary Greatly By Drug Class
85% Compliance Level Needed For Budgeted Savings
Gastrointestinal
Medications
Anti-Histamines
Hypotensive ACE Blockers
Hypotensive Receptors
Anti-Inflammatory
Beta Blockers
Total
Lipotropics
93%
92%
93%
89%
89%
90%
84%
83%

17. Average Speed to Answer
First Health Call Center Staff Are Answering Calls In Less Than 30 Seconds
3:50:24
3:21:36
2:46
Average Length of Call
2:39
2:52:48
2:24:00
1:55:12
1:26:24
0:57:36
0:16
Average Speed to Answer
0:30
0:28:48
0:00:00
Average
January
February
March
April
May

18. DMAS Will Conduct A Comprehensive Evaluation of PDL Program
Evaluation will address the following key issues:
Has the PDL program been implemented in a way to ensure a high rate of compliance without adversely affecting patient access/care?
What impact has the PDL program had on Medicaid pharmaceutical spending?
Has the PDL program impacted patient health outcomes for Medicaid clients?

19. Presentation Outline Background of PDL Development Current Status
Review of Antidepressants

20. Antidepressants (SSRIs) & Antianxiety Drugs
Medicaid spent approximately $29.5 million in total funds (net of rebates) on SSRIs ($15.8), anti-anxiety drugs ($6.9), and new generation antidepressants ($6.8) in FY 2003
The SSRI drug class is the third highest in expenditures
Excluding the SSRIs, anti-anxiety drugs and new generation antidepressants from the PDL would cost approximately $5 million (total funds) annually; a “grandfather” provision would cost roughly half of this amount

21. 2004 Appropriations Act Provides Direction on Review of Antidepressants
Item 326 BB 7
If DMAS does not exempt antidepressants and antianxiety medications used for the treatment of mental illness from the PDL, it should defer inclusion from PDL until July 1, 2005
Prior to including these drug classes in the PDL, DMAS shall provide a plan that stipulates mechanisms to: minimize adverse impacts on consumers; ensure appropriate provider education; and ensure inclusion is evidence-based, clinically efficacious and cost-effective
DMAS shall report such plan to the Governor, and Chairman of the House Appropriations and Senate Finance Committees and the Joint Commission on Health Care by January 1, 2005

22. DMAS/P&T Committee Approach
Antidepressants and antianxiety drug classes will be reviewed by the P&T Committee on October 6, 2004
In addition to receiving testimony on scientific evidence from manufacturers, clinicians and others, the P&T Committee also will receive public comments from other interested parties
If the P&T Committee recommends including these drug classes in the PDL, a report will be prepared and submitted as required by the 2004 Appropriations Act.
If recommended for inclusion in the PDL, the effective date would be no earlier than July 1, 2005