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Medicaid spending on antipsychotics expected to halve by 2016

As patent protection for second-generation antipsychotics taper off, researchers predict Medicaid expenditures on antipsychotics will decrease by approximately 50% by 2016 and 75% by 2019.

In 2011, Medicaid spent more than $3.6 billion on second-generation antipsychotics. Ninety percent of this spending, or $3.3 billion, was for five branded medications: aripiprazole, quetiapine, olanzapine, ziprasidone and paliperidone, according to a press release.

Patent protection for nearly all second-generation antipsychotics — including aripiprazole, Saphris (asenapine, Actavis), clozapine, Fanapt (iloperidone, Vanda), Latuda (lurasidone, Sunovion) olanzapine, paliperidone, quetiapine and ziprasidone — has expired or will expire within the next few years, according to the release.

Eric Slade, PhD, and Linda Simoni-Wastila, BSPharm, MSPH, PhD, of the University of Maryland, assessed quarterly state-level aggregate data from the Medicaid state drug utilization database on outpatient antipsychotic prescriptions in Medicaid between 2008 and 2011. They developed predictions of antipsychotic expenditures in 2016 and 2019 on the basis of the estimated percentage reduction in Medicaid expenditures for risperidone, the only second-generation antipsychotic available generically during the study period. Two models of savings from generic risperidone use were developed, based on constant prices and valuable prices.

“Mental health medications are among the most prescribed drugs in Medicaid, and many of these medications have recently become available as generics or soon will be,” Slade said in a press release. “Our predictions suggest that this change will result in a substantial financial windfall to states and to the federal government.”

Slade and Simoni-Wastila predicted that annual Medicaid expenditures for antipsychotics will decrease by $1,794 million (48.8%) by 2016 and by $2,814 million (76.5%) by 2019.

“These findings have the potential to improve the lives of people suffering from schizophrenia and other mental disorders,” Bankole A. Johnson, MD, DSc, MB, ChB, chairman of the University of Maryland School of Medicine psychiatry department, said in the release. “As someone who treats patients, I see firsthand how these diseases can cause suffering, and I hope this study can help alleviate some of that pain.”

Disclosure: Please see the full study for a list of all authors’ relevant financial disclosures.