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.
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, which includes expanded investor information and resources.

Express Scripts, Inc.

Related Healthcare Costs Articles from Brightsurf:

Healthcare as a climate solution
Although the link may not be obvious, healthcare and climate change -- two issues that pose major challenges around the world -- are in fact more connected than society may realize.

Healthcare's earthquake: Lessons from COVID-19
Leaders and clinician researchers from Beth Israel Lahey Health propose using complexity science to identify strategies that healthcare organizations can use to respond better to the ongoing pandemic and to anticipate future challenges to healthcare delivery.

Poor women in Bangladesh reluctant to use healthcare
A study, published in PLOS ONE, found that the women living in Dhaka slums were reluctant to use institutionalised maternal health care for fear of having to make undocumented payments, unfamiliar institutional processes, lack of social and family support, matters of honour and shame, a culture of silence and inadequate spousal communication on health issues.

Women and men executives have differing perceptions of healthcare workplaces according to a survey report in the Journal of Healthcare Management
Healthcare organizations that can attract and retain talented women executives have the advantage over their peers, finds a special report in the September/October issue of the Journal of Healthcare Management, an official publication of the American College of Healthcare Executives (ACHE).

Seaport expansion costs will greatly exceed sea-level rise adaption costs through 2050
Seaport footprints will need to expand by up to 3,689 square kilometers (1,424 square miles) worldwide in the next three decades to cope with the combination of sea-level rise and rising demand, according to a new study published in Earth's Future, a peer-reviewed scientific journal focusing on climate change and future sustainability.

Healthcare innovators focus on 'quality as a business strategy' -- update from Journal of Healthcare Quality
Despite two decades of effort -- targeting care processes, outcomes, and most recently the value of care - progress has been slow in closing the gap between quality and cost in the US healthcare system.

How runaway healthcare costs are a threat to older adults and what to do about it
Empowering Medicare to directly negotiate drug prices, accelerating the adoption of value-based care, using philanthropy as a catalyst for reform and expanding senior-specific models of care are among recommendations for reducing healthcare costs published in a new special report and supplement to the Winter 2019-20 edition of Generations, the journal of the American Society of Aging (ASA).

Suboptimal diet and cardiometabolic disease healthcare costs in the US
Approximately $50 billion dollars of the annual healthcare cost of cardiometabolic disease in the US population could be associated with poor diet, according to a research article published this week in the open access journal PLOS Medicine.

Increasing transparency in the healthcare sector: More might not be better
More isn't always better. That's what researchers say when it comes to transparency in the US healthcare system.

LGBT+ women face barriers to healthcare
New study suggests diversity messaging is not filtering down to frontline staff.

Read More: Healthcare Costs News and Healthcare Costs Current Events is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to