Effects on the Cost and Utilization of Proton Pump Inhibitors From Adding Over-the Counter Omeprazole to Drug Benefit Coverage in a State Employee Health Plan

OBJECTIVES: To evaluate the financial effects in a state employee health plan of a change in the drug coverage policy to include over-the-counter (OTC) omeprazole in a tier-copayment drug benefit design that favored the OTC drug. METHODS: The policy change in the Arkansas State Employee Benefit Division (EBD) involved 2 principal parts: OTC omeprazole placed in a new OTC copayment tier ($5) and an increase in pharmacy reimbursement to a $13 dispensing fee for each OTC omeprazole prescription. The prescription claims database was used to examine utilization and cost data for beneficiaries who received prescriptions for a proton pump inhibitor (PPI) during the 2-month period (January and February 2004) preceding the change in policy to cover OTC omeprazole compared with the 2-month period following the policy change (March and April 2004). RESULTS: During the first week of the new policy (March 1-7, 2004), OTC omeprazole accounted for 47% of all PPI claims. From the third week through the end of the 2-month study period, OTC omeprazole represented 60% of PPI claims. This shift to OTC omeprazole from prescription PPIs produced EBD average savings of $40.86 (40.5%) per PPI claim in the first 2 months after implementation of coverage of OTC omeprazole compared with the immediate previous 2-month period. The average copayment savings for EBD beneficiaries were $4.20 (16.5%) per PPI claim. The average increase in pharmacy reimbursement was 118% ($6.27 per claim in the postperiod versus $2.88 per claim in the preperiod). Despite a 17.2% increase in utilization as measured by days of PPI therapy per member per month (1.91 PMPM) in the postperiod versus 1.63 in the preperiod, EBD savings were $2.11 (38.9%) PMPM. Based upon PMPM savings of $2.56 in the second month of coverage of OTC omeprazole, annual savings would be about $3,978,240 for average eligible membership of 129,500 in this state employee health plan. CONCLUSIONS: This policy change to include coverage of OTC omeprazole in the state employee drug benefit plan produced savings to the state of as much as 50% of the total cost of PPI drugs despite an apparent small increase in utilization of PPIs and an increase in pharmacy reimbursement of more than 100%. Plan beneficiaries realized significant savings on average for PPI drugs and particularly for each OTC omeprazole prescription.