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

OBJECTIVES: 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.
METHODS: 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.
RESULTS: 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.
CONCLUSIONS: 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.