Medicaid can learn from the World Health Organization

Key Points

Medicaid formularies cost more. That’s the conclusion of a recent comparison of Medi-caid drug lists and the Model List of Essential Medicines compiled by the World Health Organization (WHO) and used as the basis for 131 national formularies around the world. The United States is 1 of only 20 WHO member nations that do not use the list.

The numbers indicate that states could improve quality of care and reduce costs by using WHO's Essential Medicines List as the starting point for their own Medicaid preferred drug lists.

Needed: A national list

"If we started with a national evidence-based list, it could function very much as the WHO list does in low-resource settings. Some countries take the WHO list and use it as a national formulary. Other countries supplement the WHO list, based on local needs and resources. States could use similar methodology, adopting a national Essential Medicines List and adapting it as appropriate."

Bero doesn't expect to see a U.S. national Essential Medicines List any time soon. But she is seeing strong interest in the evidence-based methods that WHO uses to create its essential drug recommendations. Ten states and the Canadian Agency for Drugs and Technologies in Health have been collaborating on the Drug Effectiveness Review Project for a decade. Other states use the Reforming States Group to search for ways to make healthcare more effective and reduce costs.

Doing their own thing

"Our message to states is that we should be making purchasing decisions based on the best available scientific evidence," Bero said. "That clearly is not happening now. There is huge variability in access to medicines by state and there doesn't appear to be any evidence-based process by which drugs get on the different state Medicaid lists."

States are not rushing toward wholesale changes to their Medicaid drug lists, said Jack Hoadley, PhD, research professor, Georgetown University Health Policy Institute, Washington, DC. Medicaid gives states wide latitude in setting and enforcing preferred drug lists. States want to keep that flexibility.

"Some states essentially let prescribers write for anything," he said. "Other states require significant documentation to write off the preferred list, documentation that many prescribers consider to be excessive. States want to apply their own twists to the system."

A public health tool

Bero was senior author on a comparison of state Medicaid formularies and the WHO Essential Medicines List published in the August issue of the American Journal of Public Health. She has also taken part in the WHO Model List of Essential Medicines selection process since 2005. The 17th edition of the biannual list was published earlier this year.

The WHO selection process is a public health tool, said Bero. The selection committee considers the published evidence on efficacy and safety, and prevalence of disease as well. Cost may be evaluated, but no drug is excluded because of cost.

"It really comes down to the values in society and the amount of money you are willing and able to bring to bear on newer products," Bero said. "For example, when antiretrovirals were first introduced, they were all brand-name products and very expensive, but they were still listed as Essential Medicines. The essential medical needs of the population were huge and antiretrovirals were definitely proven to be efficacious, so they were listed. The demand for them was so great that it wound up driving prices down in low-income settings and populations."

Comparison by use and cost

Researchers at UCSF compared the 2009 version of the Essential Medicines List with the Medicaid fee-for-service preferred drug lists published in 2009 by 40 states and the District of Columbia. Drugs on a state's preferred list are available without prior authorization or other special prescribing or dispensing restrictions. Some states and all Medi-caid managed-care programs were excluded because their formularies were not available online.