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BILL # SB 1672 |
TITLE: AHCCCS; antipsychotic drugs; authorization |
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SPONSOR: Kavanagh |
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PREPARED BY: Chandler Coiner |
STATUS: As Introduced |
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The bill would prohibit the Arizona Health Care Cost Containment System (AHCCCS) and its contractors from implementing prior authorization requirements for antipsychotic drugs prescribed to members 18 years or older with a serious mental illness (SMI). The bill would also prohibit AHCCCS and its contractors from requiring a member to show a failure to respond to more than 2 alternative antipsychotic drugs before covering a particular antipsychotic drug.
Estimated Impact
AHCCCS estimates the bill would increase costs by between $27 million-$120 million General Fund (between $180 million-$814 million Total Funds) annually. This would be due to both 1) members whose prior authorization requests for antipsychotic drug coverage that were previously denied would now be approved, and 2) between 10% and 70% of members switch from low-cost generic drugs to high-cost brand name drugs.
We concur with the agency that there could be a substantial cost increase, and we also concur that members shifting to brand name drugs would increase costs. However, we also believe that estimating the percentage that switch is inherently speculative.
AHCCCS' estimate is based on the following utilization and price data:
1) Of the 771,969 covered antipsychotic prescriptions AHCCCS covered in Contract Year (CY) 2024, 692,302 were for generic drugs and 79,667 were for brand name drugs.
2) There were 4,035 denials of brand name antipsychotic drug coverage via prior authorization in CY 2024.
3) The average pharmacy reimbursement cost of the top 5 antipsychotic medications that currently require prior authorization is $1,545 per month.
4) AHCCCS estimates that covering the prescriptions that were previously denied would increase costs by $75 million Total Funds (4,035 × $1,545 × 12 months). AHCCCS estimates the General Fund share is 15%, or $11 million.
The agency estimate also assumes the following additional costs:
1) The average cost of a generic antipsychotic was approximately $20 per prescription.
2) AHCCCS therefore assumes that if a member shifts from a generic to a brand name antipsychotic, this increases costs by $1,525 per prescription.
3) AHCCCS estimates that if:
- 10% switch, this increases costs by $106 million Total Funds (692,302 × $1,525 × 10%) and $16 million General Fund.
- 70% switch, this increases costs by $739 million Total Funds (692,302 × $1,525 × 70%) and $109 million General Fund.
2/23/26