The National Center for Policy Analysis (NCPA) has released a white paper arguing that the federal and state governments could save billions through changes to Medicaid pharmacy benefits management.  The paper promotes increasing the use of generics, negotiating competitive dispensing fees, improving drug utilization controls, and negotiating discounts and reimbursements with drug manufacturers similar to those obtained by private insurers.  The authors also highlight the importance of controlling Medicaid costs in light of the program’s role in expanding health coverage under the national health care reform law.

From the report:

Medicaid is a joint federal-state program that provides medical care to more than 60 million low-income individuals and families.1 Over the next few years, Medicaid enrollment is expected to swell and spending is set to explode.

Drug therapies often substitute for more expensive and less effective surgical treatment and can reduce the need for hospitalization. Americans see their doctors more than 890 million times each year, and two-thirds of office visits to physicians result in prescription drug therapy.12 Even though they appear to provide better value for money than other forms of therapy, drug expenditures are one of the fastest growing components of the Medicaid program.

Full Report: Increasing the Cost-Effectiveness of Medicaid Drug Programs (PDF | 1.72 MB)

National Center for Policy Analysis. (2011). Increasing the cost-effectiveness of Medicaid drug programs.