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PATRICIA A. RUSSO, PH.D., M.S.W., R.N., is Director, Outcomes Research and Econometrics, The Medstat Group, Washington, DC. MARK W. SMITH, PH.D., is Associate Director, Health Economics Resource Center, Department of Veterans Affairs, Menlo Park, CA. MADHAV NAMJOSHI, PH.D., is employed at Lilly Research Laboratories, Eli Lilly and Company, Indianapolis, IN.

Address correspondence to Dr. Russo at Medstat, 4301 Connecticut Avenue, N.W., Suite 330, Washington, DC 20008 (patrusso4{at}earthlink.net).

Purpose. The change in direct medical costs for schizophrenia patients who were started on olanzapine or risperidone and who were privately insured was studied. Methods. A retrospective analysis of 1996–1999 data from the databases representing the health care experiences of individuals employed by large organizations and their dependents was performed. The sample included all individuals with a drug claim for olanzapine or risperidone, a claim with a schizophrenia diagnosis within 90 days of the drug claim, no claim for the same drug in the prior six months, and continuous health-plan enrollment for 12 months before and after the prescription. Results. The sample included 162 patients initiated on olanzapine and 119 patients initiated on risperidone. Demographic and clinical profiles were not significantly different between groups. Annual schizophrenia-related prescription and outpatient costs increased following initiation on olanzapine or risperidone compared with the preinitiation period. This was partially offset by a decrease in inpatient expenditures. Olanzapine initiators had higher outpatient drug expenditures than risperidone initiators in the 12 months following initiation (adjusted means, $2105 versus $1934) (p < 0.05), but there was no significant difference between groups in total schizophrenia-related payments ($5251 versus $4950). Conclusion. The total health care expenditure related to treating schizophrenia was similar between privately insured patients who were initiated on olanzapine and patients who were started on risperidone. Index terms: Antipsychotic agents; Costs; Drug comparisons; Olanzapine; Pharmacoeconomics; Risperidone; Schizophrenia