State acts to stop HMOs from restricting coverage of drugs. (Up Front).

State health regulators are wading into a previously unmonitored area of prescription drug coverage by barring health maintenance organizations from restricting access to certain product classes.

In an emergency order issued last month, California's Department of Managed Health Care told insurers they cannot drop coverage for non-sedating antihistamines now that the market leader in the category, Claritin, is available over the counter.

The department acted following complaints from consumers who were having trouble getting approval for Allegra and other non-sedating antihistamines that still require a prescription.

The department's action is seen as one of the first moves against a trend by HMOs to lower drug costs by pushing popular prescription drugs over-the-counter, and then restricting coverage for similar drugs still requiring them.

"We wanted to make sure if it's medically necessary for a patient to have access to a drug they can have access to it," said Steven Fisher, the department's deputy director for communications and planning.

The department took action pending the adoption of broader regulations governing prescription drug benefits. It was given new authority under a law passed by the state Legislature last year aimed at better regulating drug benefits.

Test case

Claritin became available without a prescription in December following a groundbreaking move by Thousand Oaks-based WellPoint Health Networks Inc. to petition the Food and Drug Administration to move it and other prescription non-sedating antihistamines to OTC status. The FDA has so far only approved Claritin for OTC sales.

Normally, drug makers are the ones to decide when to petition for OTC status. But WellPoint, which had spent $45 million annually on Claritin alone, argued they could safely be made available.

WellPoint spokeswoman Lisa Mee-Stephenson maintained that the state department's order was unnecessary because the company was still making Allegra and other prescription nonsedating antihistamines available to patients. She conceded, though, that the insurer is making access more difficult. "The prescribing physician needs to show the patient has first failed on Claritin," Mee-Stephenson, said.

WellPoint's involvement in pushing Claritin and similar drugs toward OTC status has been opposed by both consumer organizations and drug makers, two groups normally at odds.

Consumer groups say they are concerned that moving drugs to the OTC market will end up restricting access to ones that remain under prescription, while forcing consumers to pay more out-of-pocket. Claritin is being sold for nearly $10 for only a five-day supply, while co-payments for a monthly supply of prescription antihistamines could be as little as $5 or $10. The consumer groups also are worried that antihistamines are only the tip of the iceberg.

"We have to make sure there is coverage for prescription drugs," said Linda Golodner, president of the National Consumers League. "It isn't true that everyone can take Claritin and feel fine."

Schering-Plough Corp., which manufactures Claritin, originally opposed WellPoint's petition, but changed its mind after introducing a second-generation product called Clarinex.

Drug company support

Still, a company spokesman hailed the state's move, saying it did not want access to its prescription version of the drug hampered.

"For many patients, allergies can be a serious disease with significant associated illnesses such as asthma," said Bill O'Donnell, a Schering-Plough spokesman. "We believe that managed care organizations must continue to ... provide access to prescription allergy medications."

Mara Goldstein, an analyst with CIBC World Markets, said it makes sense financially for drug makers to move some prescription drugs to over-the-counter status but not antihistamines.

She said the drugs are widely prescribed, unlike others that may be missing a wider market while on prescription status. In general, market pressures force prices and profit margins on OTC drugs downward, she added.

WellPoint has attempted to respond to the criticisms by noting that a branded generic version of Claritin by Wyeth Laboratories called Alavert will soon be available on store shelves for less than $20 for a 24-day supply.

Claritin's price also will get cheaper once store-label brands become available, probably making the cost of a monthly supply about the same as its members' average $10 co-payment.

The company maintains that by saving premium dollars it will have more to spend on newly introduced prescription drugs. "Our job is to protect the affordability of the drug benefit," Mee-Stephenson said.