Physicians wary of insurers covering OTC medications
■ Two Minnesota insurers are entering rare territory in an attempt to save money. Physicians are concerned about whether patients will get the drugs they need.
By Jonathan G. Bethely — Posted Aug. 21, 2006
Four years ago, WellPoint Health Networks successfully petitioned the Food and Drug Administration to make Claritin available without a prescription. A year later, the FDA approved a nonprescription version of Prilosec. Insurers expected to save big money thanks to those approvals.
Not only did they no longer have to cover two of the biggest sellers in the two biggest-selling drug categories -- antihistamines and proton pump inhibitors -- but they could also steer patients toward the OTC medications by increasing co-pays and requiring prior authorization for the prescription counterparts.
Despite the FDA approvals and other plan strategies, such as using the rate of prescribing generics as part of a physician's pay-for-performance package, health plans are still seeing their annual drug costs go up by double-digit percentages. So a few plans are doing something that was unforeseen when WellPoint pressed its case to the FDA. Blue Cross Blue Shield of Minnesota and Medica, another Minnesota plan, are paying the full cost for over-the-counter Claritin and Prilosec.
The plans decided it would be cheaper to pay for the nonprescription medicine than even for the generic version of a prescription drug.
"We started the program because we saw an opportunity for savings," Minnesota Blues spokeswoman Jan Hennings said.
And savings there are. The Minnesota Blues says it's saved $400,000 in the first three months of its program, which began with the plan mailing notices to members taking allergy and heartburn drugs, informing them they could get over-the-counter versions at no cost if they got a prescription. The plan says it expects to save another $600,000 in the next three months of its nascent program.
Medica, which has had its program in place since 2003, says it saved $5 million in 2005, $4 million of it on heartburn medication alone. The cost difference is stark -- the Web site for the Walgreen's drugstore chain shows a 30-capsule prescription of Prilosec costs about $122, versus about $22 for a similar amount of the OTC version.
Will the idea spread?
Many Medicaid plans also cover over-the-counter drugs, and the Internal Revenue Service in 2004 allowed nonprescription drugs to be reimbursed through pretax flexible spending accounts. But most major health plans have not yet decided to follow the Minnesota plans' lead.
Still, physicians are worried about where this trend might be heading -- and they wonder if plans steering patients toward nonprescription drugs is a case of being penny-wise but pound-foolish.
David D. Luehr, MD, a family physician and president of the Minnesota Medical Assn., said the Blues and Medica programs are good for patients needing to save money. But he said plans fail to realize that switching a medication isn't just a matter of writing a new prescription. Physicians sometimes need to schedule additional office visits and redo lab work to accommodate new treatment. "I'm not sure that that part is saving money," Dr. Luehr said.
More work for physicians?
Larry S. Fields, MD, president of the American Academy of Family Physicians said he suspects the plans hope patients are able to make the switch without an office visit.
"Unfortunately, in the payment systems of today the only way physicians get paid for work is to see people," said Dr. Fields, a family physician in Ashland, Ky. "I'm sure [insurers] would prefer patients to just make a phone call. To me it sounds like a lot of work. People should be adequately paid for the work they perform."
Also, not every antihistamine or proton pump inhibitor is alike, Dr. Luehr said. "The frustration we have is that sometimes the branded, more expensive medication is needed. It requires some time and effort to convince the patients."
Allergist Stanley Goldstein, MD, chair of the American Academy of Allergy, Asthma and Immunology's Practice and Policy Division, called the OTC programs "a step backward."
"We don't recommend OTC if we think it isn't going to be effective," said Dr. Goldstein, director of Allergy and Asthma Care of Long Island in Rockville Centre, N.Y. "[The patient] isn't going to make a decision based on what's good for them. The point is you're saying in a way 'I'll give you ineffective medical care but I'm going to pay you for it.' "
Like Dr. Luehr, Dr. Goldstein said insurers think they're saving money in the short term, but ultimately they may end up spending more money on patients who decided to make the switch to OTC against their physicians' recommendations.
"It's a matter of making poor medical decisions," Dr. Goldstein said.
Kerry Bendel, director of pharmacy for Medica, responded by saying physicians should feel no compunction to prescribe OTC drugs.
"We offer the OTC as an alternative -- we don't mandate," Bendel said. "It's up to the physician whether or not it will be beneficial to the patient."