The February report pieces together different data on prescription volume by state – mostly through our staff’s tabulations – showing the distribution of each state’s total 2015 prescriptions between those paid by Medicaid, Medicare Part D, and all other payer sources combined. There was considerable variation in this percentage distribution in each state.
The Texas Association of Health Plans engaged The Menges Group to prepare an analysis of the impacts of switching from a statewide uniform Medicaid prescription formulary to a model that allows Medicaid MCOs flexibility to develop their own preferred drug lists (PDL). Currently, Medicaid MCOs in Texas must utilize a uniform formulary controlled by the state. In this report, we assessed a model in which Medicaid MCOs have the latitude to manage the covered mix of drugs through their own PDLs. We conducted this assessment using multiple analyses, including a cost per prescription analysis, therapeutic class analysis, and quantitative and qualitative survey of Texas MCOs. This approach is estimated to result in total annual Medicaid savings of $236 million and annual general revenue savings of nearly $100 million. For this reason, a policy change towards the PDL latitude model is recommended. In addition to the report, a presentation summarizing the findings can be found in the Executive Summary hyperlink.