Georgia Medicaid program saves $20 million by controlling use of anti-ulcer drugs

January 14, 2005

ST. LOUIS, JAN. 14, 2005 - The Georgia Medicaid program reduced its prescription-drug costs by $20.6 million over a one-year period by requiring enrollees to get permission before filling prescriptions for anti-ulcer medications called proton pump inhibitors (PPIs). The savings were reported in a study published today in the American Journal of Managed Care by researchers at Express Scripts, the pharmacy benefit manager serving the Georgia Medicaid program.

In 2001, Georgia Medicaid faced a potential budget shortfall because of costs associated with the increased use of PPIs (brand drugs that treat acute upper-gastrointestinal conditions, such as ulcers and esophagitis). PPIs accounted for 5.6%, or $45.5 million, of the program's pharmacy costs and ranked first in costs among all prescription-drug classes.

An annual budget review revealed that enrollees were using PPIs for a variety of conditions that did not appear to warrant PPI use, leading to higher than normal drug costs. For these patients, a possible alternate treatment existed in lower-cost generic histamine type-2 antagonists (H2As), such as Zantac®.

After considering these factors, Georgia implemented the prior-authorization program in February 2002, requiring enrollees to obtain approval before receiving a PPI at the pharmacy.

For the study, Express Scripts researchers examined more than 1.1 million ambulatory pharmacy reimbursement claims for the program's enrollees during the 12 months before and the 12 months after the implementation of the program.

After implementation of the prior-authorization program, the use of generics increased from 31% to 79%. The result was a net savings of $20.6 million, with PPI drug expenditures decreasing from $44.1 million to $13.2 million, and H2A drug expenditures increasing from $6 million to $13.5 million. In addition, the 12-month average per member per month (PMPM) net costs for PPIs and H2As combined declined from $3.44 to $1.74.

"The PPI clinical prior-authorization program is one of the many effective tools the Georgia Department of Community Health and Express Scripts have implemented to ensure clinically appropriate and cost-effective medications are available to our patient population," said Jerry Dubberly, pharmacy director, Georgia Department of Community Health.

The study also found that requiring prior authorization for PPI reimbursement did not result in any adverse medical consequences that could have led to increased emergency room visits, hospitalizations or healthcare costs among patients who did not receive a prescribed PPI.

"Our data indicate that this prior authorization program achieved the desired effects of decreasing the Medicaid program's prescription drug costs without increasing other healthcare costs, by channeling PPIs to patients needing them and providing others with appropriate alternative therapy," said Brenda Motheral, vice president, Research and Trend Management, Express Scripts.
-end-
Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to over 50 million members through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans.

Express Scripts provides integrated PBM services, including network pharmacy claims processing, mail pharmacy services, benefit design consultation, drug utilization review, formulary management, disease management, medical and drug data analysis services, and medical information management services. The Company also provides distribution services for specialty pharmaceuticals through its Specialty Distribution subsidiary. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at http://www.express-scripts.com, which includes expanded investor information and resources.

Express Scripts, Inc.

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