Elimination of over-the-counter medication coverage in the Oregon Medicaid population: the impact on program costs...

To reduce program costs, the Oregon Medicaid program eliminated reimbursement for over-the-counter (OTC) medications. Considering that physicians might substitute more expensive prescription-only products for eliminated OTC therapy, this investigation evaluates the policy's impact on medication costs.

This retrospective investigation examines pharmacy claims for adult Medicaid eligible recipients between March 1992 and February 1994 using an interrupted time-series analysis. The policy's impact on program costs and on the number of submitted claims was evaluated separately for prescription-only and total prescribing in nine therapeutic categories.

In the preintervention period, OTC products comprised 36% (213,516 of 592,672) of drug claims and 9% ($1.36 million of $14.58 million) of medication costs in the nine therapeutic categories. Decreased program costs were noted in five categories and no significant changes were found in four others; overall, medication costs decreased from $7.86 to $7.39 per eligible recipient per month. A significant increase in prescription-only prescribing was noted in the hematinics category, but the net effect on total costs demonstrated a significant decrease.

The OTC elimination policy was successful in reducing program drug costs with limited evidence for substitution of prescription-only products. Further study is needed to determine the impact on patients who regularly received OTC medications and to evaluate secondary effects on outpatient visits, hospitalization, and clinical outcomes.