Evaluation of Product Switching After a State Medicaid Program Began Covering Loratadine OTC 1 Year After Market Availability

OBJECTIVES: The conversion of loratadine from prescription (Rx)-only to over-the-counter (OTC) status on November 27, 2002, brought about the question of how OTC products may influence utilization of both OTC and Rx-only low-sedating antihistamines (LSAs) simultaneously. North Carolina (NC) Medicaid initially did not cover loratadine OTC but subsequently changed the policy 1 year after OTC conversion, on November 23, 2003. The objective of this study was to determine patterns of LSA utilization in relation to changes in OTC availability and Medicaid coverage policy and to assess the rate of product switching associated with these policies. METHODS: Administrative pharmacy claims from the NC Medicaid population of approximately 1.1 million eligible recipients were used to study the 3 years of LSA use between July 1, 2001, and June 30, 2004. Two general methods were employed to evaluate the extent of product switching. First, monthly rates of incident use, new starts (i.e., no LSA use in the prior 12-month period) and product switching in time series were determined. These series were constructed to include a baseline period of no OTC availability, a period of OTC availability without coverage, and a period of OTC availability with coverage. Second, product switching was assessed through the use of rate-ratio calculations. Three equal 12-month periods were compared using rate ratios: (1) a baseline referent period (July 1, 2001, to June 30, 2002) during which loratadine OTC was not yet available, (2) a noncoverage period (July 1, 2002, to June 30, 2003) during which loratadine OTC was introduced to the market but not covered by NC Medicaid, and (3) a coverage period (July 1, 2003, to June 30, 2004). The primary comparison periods for the 3 years were the 5-month periods from February to June of each year. RESULTS: The use of individual drugs within the LSA class responded to coverage changes as expected, with alternative LSAs replacing loratadine use in the loratadine noncoverage period. Switching behavior for individual drugs within the LSA class was strongly associated with coverage changes. Recipients using loratadine were 2.16 times more likely to switch to an alternative Rx-only antihistamine in the noncoverage period (95% confidence interval [CI], 2.10-2.22) as compared with the baseline period. Yet they were only 1.11 times as likely not to use an Rx LSA during the last 5 months of the noncoverage period (95% CI, 1.09-1.13), as compared with the baseline period, suggesting minimal OTC uptake. The largest 12-month percentage increase in market share was observed for cetirizine (13.4%) although desloratadine accounted for the largest switch rate from loratadine at 3.10 (95% CI, 2.91-3.30), as compared with the baseline period, with a total market share increase of 7.8%. This suggests that new users of LSAs were most likely to initiate therapy with cetirizine, while existing loratadine users were most likely to switch to desloratadine. Compared with baseline switch rates, LSA users were only 0.34 (95% CI; 0.32-0.37) times as likely to switch to loratadine OTC from another (Rx-only) LSA during the subsequent OTC coverage period. LSA expenditure per member per month (PMPM) was essentially constant over time, at $3.03 in the 5-month pre-OTC period, $2.96 in the 5-month loratadine noncoverage period, and $2.93 in the 5-month coverage period for loratadine OTC. Total LSA utilization increased slightly, from 1.37 days PMPM in the 5-month pre-OTC period to 1.41 in the 5-month loratadine noncoverage period and 1.45 in the 5-month coverage period for loratadine OTC. Loratadine OTC accounted for only 4.1% of the total LSA days of therapy and 4.2% of the LSA patients in the 5-month OTC coverage period from February to June 2004. CONCLUSIONS: Medicaid recipients switched to another covered (Rx) LSA when loratadine became available as an OTC and was not covered. After the subsequent policy change 1 year later to cover loratadine OTC, there was little switching to loratadine OTC. Though the average cost per LSA claim dropped $4.15 (6.6%), from $62.79 in the baseline period to $58.64 in the OTC coverage period, time-series and rate-ratio results suggest that an additional $6.01 (10.2%) could have been saved per LSA claim had OTC coverage been in effect at the time of the conversion of loratadine to OTC status. Although coverage of loratadine OTC offers a substantial cost-savings opportunity for the Medicaid program compared with Rx-only LSAs, not covering the OTC product immediately at the time of OTC availability contributed to (a) increased switching to Rx-only LSA products and (b) little use of loratadine OTC in the subsequent OTC coverage period.