Some 20 states restrict mental health drugs paid for by Medicaid. Not Oregon. And that’s not going to change in this session’s Legislature, even in a time of budget cuts and cost-containment.
The sweeping health care reform bill, House Bill 3650, proposed curbs on psychiatric drugs paid for by Medicaid and state taxes under the Oregon Health Plan. Psychiatrists would choose from a list of generic or less expensive mental health drugs, just as doctors do for other illnesses. The projected savings: $17 million.
It was a fraction of the health cuts the state hopes to achieve with the bill — $240 million — but for supporters, managing drug costs is a no-brainer. “Everybody knows they should be,” says dentist Mike Shirtcliff, who helped write the bill.
But while other changes in the health reform legislation remain on track, key lawmakers say the psychiatric drug provision is dead and not worth the fight.
“This was one of those issues where I think the juice wasn’t worth the squeeze,” says Sen. Alan Bates, D-Medford.
The roadblocks to cost curbs on psychiatric drugs, and the arguments on both sides, show the difficulty of remaking Oregon’s health care system.
How we got here
Oregon tightened the rules on its preferred drug list two years ago. Mental health drugs were exempted as opponents said such drugs can bring unpredictable problems, more so than with drugs for other illnesses.”There’s really no way to predict if a person will experience side effects or which side effects they will experience,” says Mark Gibson, head of the Center for Evidence-based Policy at Oregon Health & Science University. The center helps Oregon and other states evaluate drugs.
This year, mental health drug cost controls resurfaced in Gov. John Kitzhaber’s proposed budget. Immediately, the line was drawn between opponents and supporters of a preferred list of psychiatric drugs.
Rep. Mitch Greenlick, D-Portland, a former pharmacist and a leader on health care in the Legislature, says the arguments against having doctors prescribe cheaper drugs before trying costlier alternatives are driven by a pharmaceutical industry that “lobbies like mad.”
On the other side of the line, Jason Renaud of the Mental Health Association of Portland argues that hospital visits by mentally ill patients would escalate, erasing any cost savings from cheaper drugs. For some Oregon Health Plan members, specific psychiatric drugs “are what stands between them and the hospital,” he says.
For Bates of Medford, it was too much change, too fast. The reforms already in the works are “very complex,” he says, referring to a centralized health insurance marketplace, or exchange, and the shift of responsibility to caregiver groups.
Bates, one of a few lawmakers negotiating the final bill, wasn’t persuaded by plans that would delay implementation or a clause shielding current patients from the preferred drug list.
Those arguments echo the two dozen lobbyists working in Salem for the pharmaceutical industry, though several declined to comment and referred queries to their national offices. Jeff Trewhitt, a national spokesman for the Pharmaceutical Research and Manufacturers of America, said Oregon would be playing “Russian roulette” by trying a cheaper drug on a patient without knowing the consequences.
But Rep. Tim Freeman, R-Roseburg, the Republicans’ point man on health care reform, says he listened not to the pharmaceutical industry, but to consumers.
One consumer who is happy the change didn’t go into effect is Michael Hopcroft, who lives in Portland. He says depression and angry outbursts made it hard to keep a job. He last worked as a janitor in 2004. Now on a new mix of drugs, he’s stable and training for clerical work. He says people on the Oregon Health Plan should not have to take less than ideal drugs.
“My concern is that with this list, psychiatrists would be prescribing to the list rather than to the needs of the patient,” he says.
Of the 20 biggest drug expenditures for the Oregon Health Plan, 13 are for psychiatric drugs, says Tom Burns, head of drug purchasing for the Oregon Health Authority. Last year, that amounted to $221 million, of which $100 million went to pay for the 98,000 people who received a prescription for mental health drugs.
The state then received $75 million in drug company rebates, most required by the federal government.
The average cost per psychiatric prescription was $95.84 — nearly double the cost of non-psychiatric prescriptions.
Once the state’s physical drug list was implemented this year, the cost per non-psychiatric prescription dropped more than 10 percent, from $55.90 to $48.04.
The pharmaceutical industry is powerful on the national and state levels. Since 2009, the pharmaceutical industry has contributed more than $300,000 to Oregon legislative candidates, according to state election records. Nationwide, it has worked closely with mental health advocacy groups to block Medicaid drug cost controls such as those proposed in Oregon. The industry gave $23 million to the National Alliance on Mental Illness, or NAMI, between 2006 and 2008, nearly 75 percent of the group’s funding. Documents surfaced two years ago in Congress showing one drug company donor urged NAMI to “play hard ball” on the Medicaid drug issue.
Chris Bouneff of the Oregon National Alliance for Mental Illness says his chapter is separate from the national one and has not received large sums from the industry.
Though opponents raise concerns of increased hospitalizations, no definitive studies prove it one way or the other. Research in Maine found more hospitalizations after a psychiatric drug list was enforced. However, a study of hospitalizations after Vermont adopted a list found they decreased. As Kitzhaber had proposed, Vermont exempted existing patients so they wouldn’t switch drugs, and the transition has been “seamless” and a “win-win,” says Bernie Profili of the Vermont chapter of the National Alliance for Mental Illness.
In Washington state, Medicaid spending on drugs dropped $100 million last year without a surge of complaints, thanks to a preferred drug list and increased use of generics, says Dr. Jeff Thompson, chief medical officer for the state’s Medicaid division.
Gibson, of OHSU, says because there’s no way to predict which drugs work well for a given person, in a state that’s short of cash, “it probably just makes sense to say we’ll start with the lower class drug and see if it works,” he says. “It’s got just as much chance of working as any other medication.”
Burns, who buys drugs for the Oregon Health Plan, says he’ll have to find other ways to find $17 million in savings, such as cutting health plan coverage of higher-priced non-psychiatric drugs.
Meanwhile, even advocates who opposed the preferred drug list see the writing on the wall.
Bouneff, of NAMI, says while he opposed the timing of the new drug rules, he also thinks added cost controls are inevitable. So he plans a work group to propose safe practices for mental health coverage and prescribing.
“A lot of the fight this session was really about the preferred drug list,” he says. “We never got to have these policy oriented discussions as to what a good system would look like.”