Drug formulary changes

Nexium is the purple pill that you've seen on TV, a proton pump inhibitor to treat acid reflux disease. AstraZeneca sold $4.6 billion dollars worth of this medication in 2005. In July 2005, TRICARE, the Defense Department's health care program for military retirees and active duty dependents, reclassified Nexium as a non-formulary drug on the ground that cost effective alternatives like now over the counter Prilosec were readily available.

Today UnitedHealthcare, the Nation's second largest health insurance company, announced that it will stop covering Nexium on the same ground. According to the Associated Press report, UnitedHealthcare took the action because it "had expected costs in the category to slow after generic and over-the-counter versions of Prilosec, the predecessor drug to Nexium, became available in 2003. But that didn't happen" -- possibly because of aggressive advertising of the drug particularly at the time when Prilosec, another AstraZeneca product, lost its patent protection. UnitedHealthcare expects to cut its proton pump inhibitor expenses in half as a result of this and related actions.