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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
AHCCCS; antipsychotic drugs; authorization
Purpose
Effective January 1, 2027, prohibits the Arizona Health Care Cost Containment System (AHCCCS) and its contractors from requiring prior authorization for prescription antipsychotic drugs and limits any step therapy protocols to no more than two distinct prescription antipsychotic drugs.
Background
AHCCCS serves as Arizona's Medicaid agency, which offers Arizona residents access to healthcare programs. AHCCCS contracts with health professionals to provide medically necessary health and medical services to eligible members. Additionally, AHCCCS must contract for a coordinated system of behavioral health services for persons deemed seriously mentally ill, including screening and intake, case management, treatment planning family involvement and a continuum of care (A.R.S. §§ 36-2901 and 36-3407).
Seriously mentally ill means persons who, as a result of a mental
disorder, exhibit emotional or behavioral functioning that is so impaired as to
interfere substantially with their capacity to remain in the community without
supportive treatment or services of a long-term or indefinite duration. In
these persons, mental disability is severe and persistent, resulting in a
long-term limitation of their functional capacities for primary activities of
daily living such as interpersonal relationships, homemaking, self-care,
employment and recreation (A.R.S.
§ 36-550)
Step therapy protocol is a protocol or program that establishes
the specific sequence in which prescription drugs that are for a specified
medical condition and that are medically necessary for a particular patient are
covered by a health care insurer under a health care plan (A.R.S.
§ 20-3651).
The Joint Legislative Budget Committee (JLBC) estimates that S.B. 1672 would increase state General Fund costs by between $27,000,000 and $120,000,000 annually, due to the approval of prior authorization requests that would previously have been denied and members switching from low-cost generic drugs to high-cost brand name drugs (JLBC fiscal note).
Provisions
1. Specifies that, before providing coverage of a prescription antipsychotic drug approved by the U.S. Food and Drug Administration to a member who is at least 18 years old with a serious mental illness, AHCCCS and its contractors:
a) may not impose a prior authorization requirement or other process that conditions, delays or denies the delivery of the drug to the member by applying predetermined criteria by AHCCCS or its contractor for covered prescription drugs, except as otherwise outlined; and
b) may impose a process, including a step therapy protocol, requiring the member to show a failure to successfully respond to up to two distinct prescription antipsychotic drugs.
2. Requires AHCCCS and its contractors to allow a member, or the member's health care provider, to bypass a step therapy protocol by submitting documentation that the member failed to successfully respond to two distinct prescription antipsychotic drugs on the member's current or previous health benefit plan.
3. Requires any step therapy protocol or other process administered to:
a) be adjudicated electronically and in real time; and
b) consider a member to have tried two prescription antipsychotic drugs if the member has two paid claims for two distinct preferred antipsychotic drugs prescribed in a nonemergency or outpatient setting within the previous five years.
4. Specifies that the antipsychotic drug coverage requirements:
a) only apply to a prescription antipsychotic drug whose use is supported by peer-reviewed, evidence-based literature;
b) apply to prescription drug coverage that is paid either on a fee-for-service basis or through a prepaid capitated health services contract under AHCCCS;
c) do not prohibit AHCCCS from contracting with a managed care organization for pharmaceutical services offered under AHCCCS if the contract complies with the outlined requirements;
d) do not prohibit AHCCCS from prohibiting or discourage the use of a generic drug; and
e) do not prevent AHCCCS from performing a drug utilization review that is necessary for patient safety or to ensure that the prescribed use is for a medically accepted indication.
5.
Defines failure to successfully respond as a determination, based
on clinically appropriate guidelines, that a patient has failed on a
medication, including a lack of efficacy during a
six-week medication trial, an allergic reaction, intolerable side effects,
significant drug-to-drug interactions or a known interacting genetic
polymorphism that prevents safe preferred medication dosing as attested to by
the patient's health care provider.
6. Defines terms.
7. Becomes effective on January 1, 2027.
Amendments Adopted by the Appropriations, Transportation & Technology Committee
· Limits qualifying antipsychotic drug claims for step-therapy purposes to those prescribed in a nonemergency or outpatient setting within the previous five years.
Senate Action
HHS 2/11/26 DP 5-1-0
ATT 2/24/26 DPA 9-1-0
Prepared by Senate Research
February 25, 2026
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