Nearly all health plans, both public and private, are struggling to manage pharmacy benefits, the costs of which have exploded over the past decade. North Carolina’s Medicaid program is no different. From 1998-2000 Medicaid prescription drug costs grew from $455 million to $754 million, an average annual increase of 29% per year. Last year the General Assembly looked at this issue and passed a measure requiring that generic medications be dispensed unless the physician explicitly orders a name brand prescription. The Department of Health and Human Services is also looking at ways to slow the growth of the Medicaid budget. While these efforts are focused on the broad issue of pharmacy, and not specific to medications for mental illness, their implementation could impact access to medications.

At the present time the state of North Carolina has taken a very measured approach to managing the Medicaid pharmacy budget. Efforts are focused exclusively on physician education about medication effectiveness and prescribing guidelines. Physician discretion in prescribing is maintained. Unlike many states, North Carolina has not implemented comprehensive prior approval or preferred drug lists. There is concern, however, that as North Carolina’s budget crisis persists there will be growing pressure to take more drastic measures in an effort to exact immediate cost savings for the state. Such action would be extremely short sighted as individuals unable to access effective medications would evidence lower compliance and require more costly hospital treatment.

We believe that individuals with mental illness must have access to treatments that have been recognized as effective by the FDA and/or NIMH and opposes measures that limit the availability of "new generation" medications. Professional judgment and informed consumer choice should determine the choice of medications based on knowledge of the effectiveness and side effects of the medication and consistent with treatment guidelines. We support the state’s efforts to manage the Medicaid pharmacy budget through physician education on medication effectiveness and prescribing guidelines. We oppose any efforts to impose a restricted formulary or a "fail-first" policy that requires trials of older, less expensive medications before prescribing newer medications.