A 30-month evaluation of the effects on the cost and utilization of proton pump inhibitors from adding omeprazole OTC to drug benefit coverage in a state employee health plan

Abstract

Objective: On March 1, 2004, the state employee health plan began covering omeprazole OTC (over the counter) at a $5 copayment. Reimbursement to pharmacy providers for omeprazole OTC increased by $10.50 per claim, from $2.50 to a $13 dispensing fee. Initially, neither generic omeprazole prescription (Rx) nor brand omeprazole Rx was covered because omeprazole OTC was available in the same strength as the Rx products at a lower cost, but an omeprazole OTC shortage necessitated coverage of generic omeprazole Rx at a $10 copay. The objective of this study was to evaluate the long-term financial impact of a drug benefit policy change on a mid-size state employee health plan and its beneficiaries associated with the addition to coverage of omeprazole OTC.

Methods: The pharmacy claims database for the employee benefits division (EBD) was used to examine utilization and cost data for beneficiaries who received proton pump inhibitors (PPIs). Pharmacy claims for the 30-month period for dates of service from December 1, 2002, through May 31, 2005, were extracted from the database, yielding a preperiod of 15 months and a postpolicy change period of 15 months.

Results: In the 15-month postperiod, the number of PPI claims per member per month (PMPM) decreased by 3.9%, but the days of PPI therapy PMPM increased from 1.71 to 1.82 (6.4%). Price as measured by the allowed charge per day of drug therapy decreased from $4.25 to $2.74 (35.6%) despite an increase of $1.89 (76%) in the average dispensing paid per PPI claim to pharmacies, from $2.49 to $4.38. The average beneficiary copayment decreased by $0.50 (2.0%) per PPI claim, from $25.06 in the preperiod to $24.56 per claim in the postperiod. Therefore, the net heath plan cost for PPIs decreased by $2.20 PMPM (37.6%) during the 15-month postperiod, from $5.84 to $3.64 PMPM, producing savings of $4,207,350, or annualized savings of $3,365,880, in this employee benefit plan of 127,495 members.

Conclusion: A change in policy to include coverage of omeprazole OTC and an increase in pharmacy reimbursement for omeprazole OTC resulted in 38% net savings to a state employee health plan. The large difference in drug acquisition cost between omeprazole OTC and the other Rx-only PPIs made it possible to implement a program intervention that provided financial benefit to pharmacists, beneficiaries, and the drug plan sponsor despite a 6% increase in PPI utilization.