Steven Costantino is commissioner of the Department of Vermont Health Access.
Steven Costantino is commissioner of the Department of Vermont Health Access. (File photo by Erin Mansfield/VTDigger)

Vermont's Medicaid program is paying top dollar for opiate addiction drugs, antipsychotics and antidepressants. And the state is bracing for an influx of specialty drugs used to treat rare diseases that will come at an even higher cost.

In the past 10 years, Vermont's doctors have written more than 271,000 prescriptions for Suboxone, a drug used to treat patients who are addicted to heroin and opiate-based prescription drugs. More than $63.1 million worth of Suboxone has been prescribed for Vermonters in the Medicaid program over the past decade.

The data comes from the Department of Vermont Health Access, which provided VTDigger with reports on the top 10 most expensive prescriptions filled for Medicaid patients in each quarter of 2006 to 2015. Data is not available for the first quarter of 2007.

The department released the information to VTDigger through a request under the Vermont Public Records Act. The data includes total spending on the top 10 drugs from 2006 to 2015, but includes the number of prescriptions for those drugs only between 2006 and 2012.

From 2006 to 2012, doctors of Medicaid patients wrote 173,000 prescriptions for $58.1 million worth of antipsychotics, 65,000 prescriptions for $16.7 million worth of antidepressants, and 186,000 prescriptions for $34.6 million worth of drugs that treat attention deficit hyperactivity disorder.

What is driving up pharmaceutical costs?


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According to a VTDigger analysis of state data, pharmacy is one of the highest categories of costs in the Medicaid programs administered by the Department of Vermont Health Access in 2015 and has been among the highest grossing categories for 10 years. While drug prices are volatile, prescription costs are generally going up.

VTDigger's analysis did not pin down a single correlation in the data that could help explain increased drug costs. A drug might be prescribed in high numbers, or a company might develop a new specialty drug that is more expensive than the highest-prescribed drugs. The prices of some drugs went up seemingly inexplicably.

"I think there's a lot of reasons for it, and I think it's really kind of an industry decision and manufacturers' decision when these prices go up," said Frank Foti, the pharmacy director at Central Vermont Medical Center, who watches the pharmaceutical market daily. "There's really a lot of speculation, but we're not in the boardroom of Merck to find out where these decisions come from."

The Department of Vermont Health Access, which oversees Medicaid, is able to negotiate with pharmaceutical companies to bring down the net cost of drugs, meaning the data in these reports make it hard to figure out how much the state actually pays.

Steven Costantino

Steven Costantino, the commissioner of the Department of Vermont Health Access, said the state usually negotiates rebates for 40 percent of the sticker price of the drug.

Sean Sheehan, the spokesperson for the Department of Vermont Health Access, said the state's spending on Suboxone, antipsychotics and antidepressants is likely related to the prevalence of the conditions they are treating. He said Vermont's Medicaid program, compared with commercial insurers, covers more people with mental health diagnoses and addictions.

"A second factor would be the unit costs on mental health drugs and Suboxone," he said. "Although several antipsychotics and antidepressants have gone generic in recent years, these classes still represent a fairly high cost per prescription though not as high as specialty drugs."

Suboxone became the highest-cost prescription drug in the Medicaid program as of the fourth quarter of 2007 due to the high number of prescriptions being filled. Between 2006 and 2012, prescriptions for Suboxone — not the cost of each prescription — went up nearly fourfold. Data on the number of prescriptions filled for Medicaid patients is not available for 2013 through 2015.

Abilify, an antipsychotic often used for schizophrenia and bipolar disorder, has remained in the top three prescriptions by cost for all years studied. However, while the number of prescriptions dropped from roughly 8,000 in 2006 to fewer than 7,000 in 2012, the cost rose from $2.7 million to $4.5 million.

Seroquel, another antipsychotic, is less expensive on a per-prescription basis. But the Medicaid program's use went from 19,054 prescriptions at a cost of just under $3.38 million in 2006 to 5,536 at a cost of $2.3 million in 2012. That means the average cost per prescription rose from $177 to $417 in just six years.

In 2006, a drug called Concerta was the only drug for treating attention deficit hyperactivity disorder on the list of the top 10 prescriptions by cost. That increased to two drugs in 2008 and three drugs — Adderall, Vyvanse and a form of Ritalin — since 2013.

Diabetes medications stayed out of the top 10 high-cost prescriptions until 2013. Data is not available on the number of prescriptions, but the cost estimates show Vermont spent up to $13.8 million, before rebates, on Lantus and Novolog between 2013 and 2015.

Specialty drugs are becoming the most expensive

In gross expenditures, the Department of Vermont Health Access spent $185.6 million on pharmacy in state fiscal year 2015 — which ran from July 1, 2014, to June 30, 2015 — or 19 percent of the department's $968.3 million in gross Medicaid program expenditures.

After deducting rebates and adjusting for inflation, net department spending on pharmaceuticals was $70.6 million in 1999, rose to $175.4 million in 2005, and fell to $104.2 million in 2015.

Pharmaceutical prices have been high historically and are volatile, Costantino said, and state expenditures on drugs will likely continue to climb in coming years. He said that's because drug companies are developing new pharmaceuticals for people with rare diseases.

"Specialty drug pricing is a critical concern to DVHA," Costantino told the House Appropriations Committee on Feb. 4. He pointed to a document that projected the U.S. would spend $401.7 billion on specialty drugs in 2020 — a 361 percent increase over 2012.

While the highest-cost drug for Medicaid has traditionally been Suboxone, a specialty drug called Harvoni, used to treat hepatitis C, entered the market in 2015 and took first place at $11.9 million.

The drug costs $1,125 per pill in the United States, according to The New York Times. Vermont is one of the few states willing to pay for the drug for Medicaid patients, according to National Public Radio.

"I think this is an issue for Medicaid directors because it puts them in kind of an ethical dilemma," Costantino said. He said states that do allow patients to take Harvoni require doctors to fill out paperwork proving the patient needs the drug before prescribing it.

"You have to have advanced liver disease and you have to have been in treatment," Costantino said. "I think we all want someone to avail themselves to a hep C cure, but if states didn't (require prior authorization), the budgets would be unsustainable."

Harvoni came on the market as an alternative to another expensive specialty drug called Sovaldi, which ranked No. 7 on Vermont's list in 2014. The sticker price of Sovaldi was $1,000 per pill, according to The New York Times. Costantino said the state is now getting better rebates on Sovaldi because of increased competition to treat hepatitis C.

In 2016, Vermont faces the cost of another specialty drug used to treat cystic fibrosis, but the drug may not be expensive enough to break into the top 10. That drug, called Orkambi, costs roughly $250,000 per patient per year, and will cost the state and federal governments $3 million before rebates.

"Generally, with specialty drugs, we don't get the rebate we get on the regular purchasing on drugs," he said. "I guess I got to put my creative mind into it and see what we can do."