Effect of Medicaid Prior Authorization on Drug Utilization
De Young, Paul
State Medicaid programs have embraced prior authorization requirements (PA) and preferred drug lists (PDLs), which steer patients towards less expensive drugs, as an effective means of holding down costs. Despite their ability to lower Medicaid spending, however, other effects, including the potential impact on patient health, remain unclear. One potential side effect of PA is a decrease in total drug utilization, as patients fail to adhere to less-desirable drugs with side-effects or lower efficacy. This study aims to determine if state-level utilization of one class of drugs non-steroidal anti-inflammatory drugs (NSAIDs) is affected after the implementation of a PA. To study the effect of PA on drug utilization, Medicaid drug utilization data and other information about state Medicaid programs were used to compare drug utilization from 2000, when few states had restrictions on NSAID use, with utilization in 2004, by which time the majority of states had implemented PA with PDL restrictions. Descriptive statistics indicate that states with PA in both 2000 and 2004 had a smaller rate of increase in NSAID usage than states with PA only in 2004 or not at all. Adopting PA between 2000 and 2004 was not found to have a statistically significant effect on the change in drug utilization over the time period, however. This may indicate that PA is not negatively impacting health through lower or higher drug utilization. Additional investigation is warranted in the area of drug efficacy and of potential medication errors and health disparities arising from PA.
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