NEW YORK (CNNMoney.com) - Eli Lilly and other drug companies that make treatments for mental illness could benefit from a provision inserted in a House budget bill that reduces Medicaid spending on other prescription drugs, according to a published report.

The Washington Post reports that the provision was inserted by Rep. Steve Buyer, R-Ind., whose district is near Lilly's Indianapolis headquarters. It would largely exempt antipsychotic and antidepressant medications from the bill's other provisions, which are designed to steer Medicaid patients to the least expensive drugs, according to the report.

The provision was applauded not only by Lilly but also by mental health advocates, who argued that mental health patients need access to specific drugs, not necessarily just the cheapest available treatment, because the complex human brain responds very differently to different drugs and different dosages.

But critics of the provision told the newspaper that it will raise drug costs for the federal government and states without improving the quality of care. The Congressional Budget Office has estimated that the provision will raise federal drug spending by $125 million over five years, while state officials say they are likely to face far higher costs, according to the report.

"This is obviously an attempt to prevent state Medicaid offices from getting cheaper, just-as-beneficial drugs to patients, and it's really going to stick it to the taxpayers," Steve Ellis, a vice president and Medicaid analyst at Taxpayers for Common Sense, told the newspaper.

Under the legislation, states would be allowed to create lists of preferred medications that it will pay for under Medicaid. Then, for the first time, they could charge higher co-payments -- even to poor children and pregnant women -- for medicines not on those lists, the Post reports. The Buyer amendment carves out an exception for mental health drugs, according to the report.

The newspaper reports the bipartisan National Governors Association, which pushed for the cost-cutting effort, argues states will save billions by guiding patients away from newer drugs. Those newer drugs may be far more expensive -- but little or no more effective -- than older alternatives, according to the report.

According to the Post, Lilly has six drugs that would be covered under Buyer's provision, including Prozac, which now has a generic alternative; Cymbalta, a newer antidepressant; Strattera, for attention-deficit disorder; Symbyax for bipolar depression; and Zyprexa for schizophrenia.

"This provision will help protect a vulnerable patient population and help ensure they receive appropriate medical care," Ed Sagebiel, a Lilly spokesman, told the newspaper. "On behalf of the patients, I ask, Why is that wrong?"

The newspaper reports that Buyer's provision passed the House Energy and Commerce Committee earlier this month over the strenuous objections of Chairman Joe Barton, R-Texas, when nine committee Republicans joined 22 Democrats to override the chairman's wishes. Buyer is a member of the committee.

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For more on the provisions of the deficit-cutting measure that passed Congress, click here.