Prior authorization of newer insomnia medications in managed care: is it cost saving?

J Clin Sleep Med. 2007 Jun 15;3(4):393-8.

Abstract

Study objectives: New pharmacotherapeutic treatment options are available to treat patients with 1 or more insomnia symptoms. However, these new pharmaceuticals are subject to a variety of managed-care tools, such as prior authorizations, that may restrict access to these medications. The objective of this study was to evaluate the economic consequences to a health plan that requires prior authorization for nonbenzodiazepine medications approved for the treatment of insomnia characterized by difficulties both falling and staying asleep.

Methods: An economic model was constructed to determine the effects of a typical prior-authorization program across a hypothetical managed-care population. Model parameters were derived from national estimates and a literature review.

Results: Economic consequences of a prior-authorization program were based on a hypothetical managed-care plan with 500,000 insured patients. An estimated acquisition cost of $300 per 100 tablets of medication requiring prior authorization, $40 to process each priorauthorization request, and prior-authorization rejection rates of 2% to 5% were considered. Using the default-model inputs of the hypothetical plan characteristics and costs, the economic model estimated a loss of $600,000 to $700,000 per year to the health plan. In a 3-way threshold sensitivity analysis when prior-authorization rejection rate was increased to 5%, the cost of each request in the prior-authorization program was decreased to $20, and the cost of a first-generation nonbenzodiazepine was decreased to a generic price (i.e. $100 per prescription), the model continued to show a net loss to managed care in each case.

Conclusions: This model showed that requiring prior authorization for newer sleep treatments might not be a cost-saving strategy for managed-care organizations.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Cost-Benefit Analysis / methods
  • Drug Costs / statistics & numerical data
  • Drug Prescriptions / economics*
  • Drug Prescriptions / statistics & numerical data
  • Formularies as Topic
  • Health Services Accessibility / economics
  • Humans
  • Hypnotics and Sedatives / economics*
  • Hypnotics and Sedatives / therapeutic use*
  • Insurance Claim Review
  • Managed Care Programs / economics*
  • Managed Care Programs / organization & administration
  • Models, Econometric
  • Sleep Initiation and Maintenance Disorders / drug therapy*
  • Sleep Initiation and Maintenance Disorders / economics*
  • United States

Substances

  • Hypnotics and Sedatives