Cost and Utilization Impacts of Oral Antihistamines in the California Medi-Cal Program

Objectives: Newer oral allergic rhinitis (AR) medications, the second-generation antihistamines (SGAs) have gained widespread acceptance because of their efficacy and reduced side effects relative to first-generation antihistamines (FGAs). There are no empirical studies comparing the costs of treatment of SGAs relative to FGAs. Methods: We analyzed data from a 20% beneficiary sample (approximately 120,000 continuously enrolled beneficiaries per year) for the Medi-Cal Fee-for-Service program during 1999 to 2000. AR medications available under Medi-Cal included three SGA medications (loratadine, fexofenadine, and cetirizine) and over 200 FGA products containing either diphenhydramine or chlorpheniramine or both. Because multiple medications were evaluated, a sample selection model was estimated using a two-stage multinomial logistic—variance components regression framework. Results: SGA medications have significantly lower total direct health-care treatment costs per patient than FGA medications with costs ranging from $347 to $448 less (P < 0.001), despite higher AR medication costs. Total drug expenditures were also not significantly different for patients using SGA or FGA medications despite SGA prescriptions averaging $47 higher than FGAs. Emergency department visits, inpatient admissions and physician office visits were also significantly lower for patients using SGA medications. Conclusions: Significant cost and utilization reductions were associated with all of the SGA medications relative to FGA drugs, despite their higher acquisition costs. If facing higher copayments for prescription AR drugs, many patients, particularly lower income patients, may choose cheaper over-the-counter (OTC) FGAs rather than SGAs. Our analysis finds this might lead to increased overall health-care treatment costs, unless Medicaid and health insurance plans subsidize OTC AR medications.