Reducing Pharmacy Costs for Massachusetts Medicaid

In 1999, a major budget deficit and a new federal law prompted state officials to request Clinical Pharmacy Services’ help in creating a Drug Utilization Review Program for MassHealth, the Massachusetts Medicaid program. At that time the state’s Medicaid pharmacy budget was approaching $1 billion.

With a wide array of our programs in place today, the pharmacy budget is now just $500 million. Our team achieves $25 in savings for each $1 spent on MassHealth DUR.

Clinical Pharmacy Services initially instituted two major initiatives:

• The generics-first program compelled MassHealth providers to prescribe A-rated generic medications before trying a brand-name drug. It also required prior authorization for brand-name medications.
• Early refill limits meant that prescriptions for pain medications could no longer be refilled early at the discretion of the filling pharmacist. Requests for early refills needed to be reviewed by a DUR pharmacist.

In 2002, Clinical Pharmacy Services began an aggressive strategy of adding new therapeutic classes of drugs to the prior authorization program every 45 days. Using evidence-based medicine and best practices, we collaborated with the MassHealth DUR Board to choose the most cost-effective products in selected therapeutic classes. These drugs were then made available without prior authorization.

These policy changes were validated during the appeals process and through retrospective drug utilization review — and other states began to turn to our model in their own Medicaid programs. Clinical Pharmacy Services continues to contain MassHealth costs by designing and applying new, more refined spending controls.