Medicaid

Three billion dollars may seem like a lot of money, but it’s a drop in the bucket when it comes to medical spending in the United States.

That’s the amount of money the Medicaid system is projected to save as five second-generation antipsychotics lose patent protection.

Medicaid is the nation’s largest payer for antipsychotic medicines, accounting for 70 to 80 percent of all antipsychotic prescriptions. The cost reduction may make access to these medications easier for people who need them.

But reviews of prescription practices show many of those drugs are going to children for non-medically approved reasons.

Generic Antipsychotics Expected to Save Billions

In 2013, Medicaid spending reached $449.4 billion, according to the Centers for Medicare and Medicaid Services. Researchers at the University of Maryland School of Medicine forecast that Medicaid payments will decrease by nearly $1.8 billion by 2016 and by $2.8 billion by 2019.

In 2011, Medicaid spent more than $3.6 billion on second-generation antipsychotic medicines. Also known as atypical antipsychotics, these drugs have fewer side effects than earlier versions. They still carry potential harmful side effects, especially in children.

The branded drugs — aripiprazole (Abilify), quetiapine (Seroquel), olanzapine (Zyprexa), ziprasidone (Geodon), and paliperidone (Invega)— accounted for 90 percent of all Medicaid spending on antipsychotic medicines.

Some second-generation antipsychotics, namely Zyprexa and the already generic risperidone, can slow a child’s metabolism and result in weight gain over 70 pounds.

Eric Slade, PhD, an associate professor of psychiatry at the University of Maryland School of Medicine, said the findings, published in the journal Psychiatric Services, suggest the patent expirations will result in “a substantial financial windfall” for state and federal governments.

“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.

Experts hope more affordable versions of these drugs will help policymakers lift restrictions on antipsychotic medications. Restrictions were put in place during the 1990s and 2000s when Medicaid spending was a concern.

Dr. Bankole Johnson, chair of the University of Maryland School of Medicine's psychiatry department, said the findings have the potential to improve the lives of people suffering from schizophrenia and other mental disorders.

“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,” he said.

Read More: Where’s All the Money Going? An Inside Look at Healthcare Spending »

Medicaid Pays for Risky Antipsychotic Use in Children

Antipsychotics are important in helping people with conditions like schizophrenia. However, research highlights how often they’re prescribed to children without psychosis.

According to a report the U.S. Department of Health and Human Service’s Office of the Inspector General released in March, 67 percent of Medicaid payment claims for second-generation antipsychotics (SGAs) presented quality-of-care concerns.

Of those concerns, more than half involved poor monitoring of physiological and behavioral changes. Forty-one percent involved “wrong treatment,” and a third involved children who were on too many drugs.

Read More: Experts Alarmed in the Overuse of Antipsychotic Drugs in Children »

Researchers who examined 687 claims for SGAs prescribed to children in five states found that only 8 percent of those drugs were prescribed for medically accepted reasons. That means the vast majority of Medicaid-funded antipsychotics were going to children as a form of treatment whose use wasn’t approved by the U.S. Food and Drug Administration (FDA).

Those conditions include bipolar disorder, mood disorders, and autism.

“It is not uncommon for doctors to prescribe — or Medicaid to pay for — SGAs for children for indications that are not medically accepted,” the report states.

Three of the 11 approved SGAs carry a boxed warning about increased thoughts of suicide. A third of the drugs went to children with conditions mentioned in the warning, such as depression.

So long as physicians determine benefits outweigh risks, the FDA does not prohibit them from prescribing a drug for off-label reasons.

“SGAs are widely used to treat children enrolled in Medicaid who have mental health conditions. However, SGAs can have serious side effects and little clinical research has been conducted on the treatment of children with these drugs,” the report states.

New York has a policy that it pays for SGAs prescribed only for medically accepted reasons, but researchers found it still paid $773,607 for 3,366 claims that violated this policy.

The problem, researchers found, is that diagnosis information isn’t included in a claim, making the policy difficult to enforce.

A separate study released in July examined more hundreds of thousands of antipsychotic drug prescriptions for children. Researchers found the most antipsychotic use, especially among boys, was consistent with impulsive and aggressive behaviors, not psychotic symptoms such as delusions.

The numbers “suggest that much of the antipsychotic treatment of children and younger adolescents targets age-limited behavioral problems,” the study states.