Q&A: Medicaid Coverage of Outpatient Prescription Drugs

Produced by the National Health Law Program with a grant from the Training Advocacy Support Center (TASC) at the National Disability Rights Network under a contract with the Administration on Developmental Disabilities (ADD), the Center for Mental Health Services (CMHS), and the Rehabilitation Services Agency (RSA). 
Question: My client is experiencing neuropathic pain, for which her physician has written her a prescription. She is a Medicaid recipient. The Medicaid agency has denied the request for coverage on the grounds that the prescription is for an ?off-label? use that the agency does not recognize. How can I challenge this decision? 
Answer: You need to find out what policies the state applied to make its coverage decision. These policies must adhere to the requirements set forth in the Medicaid Act. To determine whether your client has a viable challenge, you will need to determine whether the drug is a ?covered outpatient drug,? whether your state is using any of the federally-approved means for excluding the drug, and whether the drug has been prescribed for a ?medically accepted indication.? 

A word about terminology: 

When discussing drug coverage, the phrases ?on-label? and ?off-label? are often used. 
?On-label? uses are those uses for a drug that have been approved by the Federal Food, Drug and Cosmetic Agency (FDA). These uses have been recognized by the FDA following strict clinical trials of the drug for these uses. A drug manufacturer can market a drug for the FDA-approved uses. 
The uses of a drug that are not approved by the FDA for marketing are called ?off-label? uses. Drugs are commonly prescribed by doctors for their patients for off-label uses. The American Medical Association (AMA) has estimated that as many as 40 percent of all prescriptions are issued for off-label uses. See Jesse C. Vivian, B.S. Pharm., J.D., 28 U.S. Pharmacist 05 (5/15/03), at http://www.uspharmacist.com/index.asp?show=article&page=8_1078.htm. A recent study published in the Archives of Internal Medicine concluded that, in 2001, an estimated 21 percent of the prescriptions (150 million prescriptions) for 160 common drugs were for off-label uses. See David C. Radley, MPH, Stan N. Finkelstein, MD, Randall S. Stafford, MD, PhD, Off-label Prescribing Among Office-Based Physicians, 166 ARCHIVES OF INT. MED. 1021 (2006). Off-label prescribing was most common among anti-convulsants and the heart drugs (excluding those for cholesterol and high blood pressure) and least common among drugs used to control blood sugar in diabetes, pain-relievers and cholesterol-lowering drugs. Id. Some population groups are particularly dependent on off-label prescribing because the FDA clinical trials have excluded them. Children are an example of one such a group. 
The off-label use of drugs is legally permissible. See, e.g., Weaver v. Reagen, 886 F.2d 194, 198 (8th Cir. 1989) (acknowledging that physician?s off-label use of the drug AZT deviated from the conditions for which the drug was approved by the FDA but explaining that, ?[a]ccepted medical practice often includes drug use that is not reflected in approved drug labeling.?). 

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