August 8, 2007

UAMS Helps State Find Bargain in Evidence-Based Medicine

LITTLE ROCK – A Department of Human Services (DHS) and University of Arkansas for Medical Sciences (UAMS) program whose priority is selecting the best quality of drugs for the state’s Medicaid patients also has saved Medicaid more than $38 million since its inception.


DHS started the Arkansas Evidence-Based Prescription Drug Program (EBRx) in 2005 and partnered with the UAMS College of Pharmacy to analyze the clinical data. The program’s leaders have found that selecting the most effective medicines for doctors to prescribe doesn’t necessarily mean picking the most expensive drugs.


“We have a unique approach to pharmacy benefit management,” said Mark Helm, M.D., M.B.A., medical director of the Evidence-Based Prescription Drug Program. “For the most part, people don’t realize what we’ve done is even possible.”


Medicaid is a federal/state funded health care program for low-income individuals.


The EBRx program is different from other pharmacy benefit managers that typically rely on negotiated contracts with pharmaceutical manufacturers to provide rebates or discounts for volume purchasing, Helm said. Many benefit managers make all medicines available but require higher patient co-payments for the more costly products. Some benefit managers use formularies, or lists of products covered by an insurance plan. These formularies typically are based solely on drug costs.


Helm is one of two physicians who along with a group of pharmacists manage the Medicaid Evidence-Based Prescription Drug Program efforts within the UAMS College of Pharmacy. The program relies on a Drug Review Committee, a rotating group of independent, practicing physicians and pharmacists who review research compiled about every class of drug. The Drug Review Committee gives preference to drugs that are the most effective and the safest. In some cases, the best medicine may be a generic or even an over-the-counter drug. For example, the preferred non-sedating antihistamine for allergy sufferers is loratadine, once the leading prescription-only drug also known as Claritin that’s now available without a prescription.


Before being placed on the state list, loratadine had fallen to a 2.5-percent market share among Arkansas Medicaid patients. Today its market share is nearly 90 percent.


“Loratadine went from a product that doctors had forgotten about to a leading product in our group,” Helm said. “And we saved a tremendous amount of money.”


Based on the recommendations of the EBRx Drug Review Committee, preferred medications have been selected for 18 drug classes, and at least 30 brand-name drugs are on the preferred drug list.


The possibility of being included on the preferred drug list gives pharmaceutical companies incentive to offer deep discounts to Medicaid. In cases where competitors have drugs with no differences in effectiveness, the competition for a spot on the list will drive prices even lower, Helm said. That’s what happened with Prevacid and Nexium, which the EBRx program determined were identical medicines for acid reflux disease. Their manufacturers’ low-cost proposals got both on the preferred drug list. Before that, the two name-brand drugs had about a 60-percent market share within Medicaid, but the drugs now enjoy 100-percent market share.


Drug costs make up about 15 percent of the total Medicaid health care budget but grow at a faster rate than other health care costs, Helm said. On average, the cost of medicines selected to the preferred drug list drop by about 47 percent, producing about a $1.5 million monthly savings for the 500,000 recipients covered by Medicaid.  


Helm said the program has been so successful that it is now being offered to other insured groups, such as large, self-insured employers.


“We can help anybody who wants to make certain their insured employees are receiving the best possible medicines rather than medicines that are simply expensive with no proven benefit,” Helm said.


UAMS is the state’s only comprehensive academic health center, with five colleges, a graduate school, a medical center, six centers of excellence and a statewide network of regional centers. UAMS has about 2,435 students and 715 medical residents. It is one of the state’s largest public employers with about 9,400 employees, including nearly 1,000 physicians who provide medical care to patients at UAMS, Arkansas Children’s Hospital, the VA Medical Center and UAMS’ Area Health Education Centers throughout the state. UAMS and its affiliates have an economic impact in Arkansas of $5 billion a year. For more information, visit