RD275 - Annual Report on the Preferred Drug List Program - November 1, 2008


Executive Summary:
Item 325 ZZ.5 of the 2003 Appropriations Act directed the Department of Medical Assistance Services (DMAS) to establish a preferred drug list (PDL) program. The program was implemented in January 2004. In February 2004, the Department received approval of its PDL program state plan amendment and its supplemental rebate contracts from the Centers for Medicare and Medicaid Services (CMS).

The Preferred Drug List (PDL) program is a prior authorization plan that divides some Medicaid covered drugs (prescription and over the counter medications) into two categories: those that require prior authorization before they can be dispensed and those that do not. While there are many classifications of drugs that are not subject to the PDL or prior authorization, the PDL contains a wide range of generic and brand name products. The major goal of the PDL program is to make available high quality medications to treat patient illnesses that provide the same therapeutic benefit at a lower price than more expensive equivalent drugs.

Item 306 (R)(8) of the 2008 Appropriations Act requires that DMAS provide annual reports to the Governor and General Assembly on the status of the program. (A copy of Item 306(R) (8) is provided at Attachment A.) DMAS has submitted reports at least annually since the implementation of the PDL program. In November 2005, DMAS provided an extensive analysis of the outcomes of the PDL program implementation, the estimated savings of the PDL program, and the health effects on recipients. This study found no adverse health impacts for persons who were switched to drugs on the PDL compared to those who were allowed to remain on non-preferred drugs. The 2005 study included an exhaustive analysis of program data, which required extensive agency resources to complete. While a similar study was not completed this year, the Department does continue to monitor for potential adverse health impacts through its Pharmacy & Therapeutics Committee process and interaction with the provider, advocacy and stakeholder communities. No major concerns have been raised with the Department regarding potential negative health effects of the PDL program.