States Adopt New Tools to Control Rising Medicaid Drug Costs

Faced with continued increases in the cost of prescription drugs in their Medicaid programs, states are pursuing new approaches in attempts to control those rising costs.

In the past states have employed approaches such as beneficiary prescription limits, negotiating supplemental rebates from manufacturers, requiring prior authorization, implementing state maximum allowable cost programs, and operating preferred drug lists.

Recently, however, states are turning to a number of new mechanisms to limit the growth of Medicaid prescription drug costs, including:

  • introducing spending growth caps for Medicaid prescription drug costs, with unplanned increases in spending triggering a closer look at overall drug spending and a focus on specific drugs for utilization review;
  • closed formularies;
  • doing more to promote the use of generic drugs;
  • limiting generic drug price increases;
  • increasing prescription drug price transparency;
  • enacting manufacturer transparency laws;
  • adopting pharmacy benefit manager transparency laws;
  • aligning prices to federally negotiated drug prices.

Learn more about how state Medicaid prescription drug spending has grown and the steps states are taking to control that growth in the Kaiser Family Foundation report “Snapshots of Recent State Initiatives in Medicaid Prescription Drug Cost Control,” which can be found here.

Leave a Reply