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

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.

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.

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.

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