Medicaid Cost Control Measure Aimed at Second-Generation Antipsychotics Led to Less Use of All Antipsychotics

"Atypical" or second-generation antipsychotics are a class of drug introduced in the 1990s for the treatment of schizophrenia. Given their growing use and rising cost, these and other psychotherapeutic drugs are increasingly subject to prior authorization and other restrictions in state Medicaid programs. To evaluate the effects of these policies, we collected drug-level information on their use and on utilization management strategies—for example, requirements for prior authorization, quantity limits, and so-called step therapy—in thirty state Medicaid programs between 1999 and 2008. In the eleven states that instituted prior authorization during that period, use of atypicals per enrollee rose by 14 percent, versus 19 percent in the other nineteen states. Prior authorization also had spillover effects, in that reduced use of drugs subject to this requirement was not fully offset by the substitution of other atypicals or of typical antipsychotics. To understand the impact on patients and the resulting use of health services, studies should be undertaken of a large, national sample of Medicaid enrollees being treated with atypical antipsychotics. Comparative effectiveness research should guide physicians and health plans on appropriate first treatments, while prior authorization policies should focus on moving patients to appropriate second-line therapies when necessary.