Within the VA, the cost of second-generation antipsychotics accounts for approximately 12 percent of $760 million in the direct medical care dollars that are devoted to the treatment of schizophrenia. The money spent on second-generation antipsychotics, first introduced approximately 15 years ago, represents a dramatic growth in medication expense. Although attempts have been made to manage expenditures for antipsychotics, they have not resulted in profound savings (6). Although the cost of antipsychotics has risen since the introduction of second-generation antipsychotics, overall expenditure on mental health within the VA has, in inflation-adjusted dollars, decreased by 25 percent since 1996 (7). Thus, with antipsychotic expenditures taking a large slice of a decreasing pie, spending in other areas, such as staffing, must almost inevitably suffer. Although spending 12 percent of mental health care dollars on antipsychotics was not an explicit goal of the VA administration, it is unclear how one would determine a priori what the optimal percentage of expenditure on medications would be—although a comparison of the benefits of increased spending for second-generation antipsychotics with the risks of decreased staffing or other expenditures would certainly be a crucial part of that determination.
These data also demonstrate the magnitude of the savings the VA realizes through its discounted drug prices. Federal law, through the establishment of the federal supply schedule, ensures that medications are made available to the VA at deeply discounted prices (8). Similar proposals at the state level have been highly contested (9) and have received much publicity recently, because some state-supported prescription plans, especially those supporting persons with serious mental illness, find themselves in serious financial difficulty (10).