Payers use a variety of methods to control prescription drug costs including different financing arrangements, prior authorization, preferred drug lists, and co-payments – each of which target a different part of the financing and delivery system. Last week, I wrote about Medicaid pharmacy benefit financing arrangements including the trend towards primary carve-outs (see The Changing Medicaid Pharmacy Carve-Out Landscape). This week our team examined the uniform preferred drug list (PDL), another aspect of pharmacy benefit management in our latest market intelligence report: State Medicaid Adoption Of Uniform Preferred Drug Lists.
What exactly is a PDL and what is a uniform PDL? A PDL is list of medications that a payer or health plan “prefers” and therefore will cover without prior authorization (these medications may still be subject to quantity and dosage limits or safety edits). Typically, medications that are preferred are either a generic formulation or the payer has been able to negotiate a major discount on the cost by listing the medication as preferred. Generally, the PDL is broken up by class of drugs: for example, antipsychotics vs. antidepressants vs. steroids vs. beta blockers. Payers can include all drug classes on the PDL or choose to exclude certain classes. In general, when a class is excluded, all drugs in that class are considered preferred.
While PDLs are used by all payers—Medicare, Medicaid, and commercial—the uniform PDL is unique to Medicaid. When a state Medicaid program puts a uniform PDL in place, it standardizes the preferred drugs across the Medicaid health plans and the fee-for-service (FFS) program. In states without a uniform PDL, the PDL can vary between the FFS plans and the health plans. A variety of names are used to describe this practice including single PDL, statewide PDL, and unified PDL.
What are the advantages of a uniform PDLs? For provider organization clinical teams, uniform PDLs for Medicaid can simplify the process for prescribing medications. Instead of checking the PDL of each health plan, prescribers can be fairly confident in knowing the availability and access to medications for all Medicaid beneficiaries. For consumers, uniform PDLs can help eliminate some of the confusion with choosing a health plan and can make switching between health plans less complicated.
How many state Medicaid programs have uniform PDLs? Of the 30 states with Medicaid managed care, 13 use a uniform PDL. All of these states include at least one mental health and addiction drug class on the uniform PDL. There are no states that have uniform PDLs only for mental health drugs. In 2019, seven of the 13 states with uniform PDLs set their own prior authorization requirements, clinical criteria, and other restrictions.
During the last couple of years more states have moved to a uniform PDL. Between 2017 and 2019, Arkansas, Louisiana, Minnesota, and Virginia added a uniform PDL (note that West Virginia ended its integrated financing arrangement for pharmacy). In the future, at least two states are planning to implement uniform PDLs. Ohio plans to implement a uniform PDL for its health plans on January 1, 2020 (see Unified Preferred Drug List). Pennsylvania is also planning to implement a uniform PDL for its health plans on January 1, 2020 (see Enacted Budget Presentation). You can learn more about these states in the Ohio Behavioral Health System State Profile Report and the Pennsylvania Behavioral Health System State Profile Report.
For more on medication management and uniform PDLs, check out our latest market intelligence report: State Medicaid Adoption Of Uniform Preferred Drug Lists. The report focuses on trends in the use of uniform PDLs and uniform prior authorization requirements. It provides a state-by-state look at whether a state has a uniform PDL for managed care, sets prior authorization requirements for the health plan, and whether the PDL includes mental health drugs. In states without integrated financing for pharmacy, it explores how mental health drugs are managed.
To learn more, join us at The 2020 OPEN MINDS Performance Management Institute in Clearwater, Florida on February 13 for the session, “Population Health Management For The Complex Consumer Market: How To Utilize Data To Coordinate Services Across The Care Continuum” featuring James Stewart, President & CEO, Grafton Integrated Health Network & Advisory Board Member, OPEN MINDS.