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Insurers Want More Room for Generic Drugs in Medicaid

Aimee Sharp
Author | Shield HealthCare
03/16/16  9:44 AM PST

By Edgar Walters for The Texas Tribune

While Texas lawmakers are studying ways to reduce costs in the state’s Medicaid program for the poor and disabled, health insurance companies are making a business pitch.

Health plans could save the state roughly $100 million per year, they say, if Texas would give them more freedom to choose the drugs they think are most appropriate for Medicaid patients, likely allowing them to prescribe generic drugs over more expensive brands.

A study commissioned by the Texas Association of Health Plans, an industry group, found that Texas pays about the national average cost per prescription but prescribes name-brand drugs at a higher rate than all but five other states.

Managed care organizations, the private insurance companies that manage Texas Medicaid, hope the findings will spur lawmakers to give them more authority to pick their own preferred drug lists, known as formularies.

“It’s time to eliminate the barriers that are keeping Texas Medicaid health plans from ensuring Texans in Medicaid have access to the life-saving drugs they need, when they need them, and to do so in a way that brings down costs, saves taxpayer dollars and improves the quality of care,” Jamie Dudensing, the association’s chief executive, said in a prepared statement.

Currently, health plans in the Texas Medicaid program are responsible for managing patients’ prescription drug benefits, but all plans must use a uniform preferred drug list composed of medicines recommended by a state board.

Many advocates for people with chronic illnesses approve of that approach because it provides a public venue to tell Texas officials about which drugs are most effective for patients with specific medical needs.

Allowing private insurers to pick their own drug lists would compromise that avenue for patient input and the transparency that comes with it, said Greg Hansch, the public policy director for the National Alliance on Mental Illness’s Texas affiliate.

Read the Full Article at The Texas Tribune.


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