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Medicaid Spending on Antipsychotics Expected to Drop by Almost 50%

Savings on the horizon as patent cliff arrives

Patent expirations on several leading antipsychotic drugs could save Medicaid billions of dollars a year as the medications become available in cheaper generic versions, a new study finds.

Patients covered by Medicaid, the publicly funded insurance program for the poor, account for 70% to 80% of all antipsychotic prescriptions in the United States, the researchers said. The lower costs of second-generation antipsychotics, such as aripiprazole (Abilify, Otsuka) and quetiapine (Seroquel, AstraZeneca) could prompt Medicaid to lift restrictions on access to the drugs, the study authors predicted. The drugs are used to treat mental illnesses such as schizophrenia and bipolar disorder, according to a report by HealthDay.

"Mental health medications are among the most prescribed drugs in Medicaid, and many of these medications have recently become available as generics or soon will be," said Eric Slade, an economist and associate professor in the psychiatry department at the University of Maryland School of Medicine. "Our predictions suggest that this change will result in a substantial financial windfall to states and to the federal government."

In 2011, Medicaid spent more than $3.6 billion on second-generation antipsychotics, a category of drugs introduced in the 1990s. Five brand-name drugs — aripiprazole, quetiapine, olanzapine (Zyprexa, Eli Lilly), ziprasidone (Geodon, Pfizer), and paliperidone (Invega, Janssen) — accounted for 90%, or $3.3 billion, of that spending, the study found.

Using forecasting models, the research team estimated that Medicaid's annual spending on antipsychotic drugs will fall by nearly 50%, or $1.8 billion, by 2016. Spending should drop another $2.8 billion by 2019, they predicted.

The study was published in the journal Psychiatric Services.

Source: HealthDay; September 4, 2015.

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