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Tag: Prescription Drugs

Publication

Building upon our 2014 report titled Prescription Drug Adherence in Medicaid Managed Care, this report provides updated analyses performed on medication adherence, assesses the impacts of Medicaid expansion and the COVID-19 pandemic on medication adherence, and offers recommendations for further improvement to Medicaid medication access and adherence.

5-Slide Series

This edition summarizes our tabulations of several key Medicaid prescription drug cost and usage trends across the 2018-2022 timeframe. Our findings include:

• Pre-rebate costs per Medicaid prescription grew sharply, at an average annual rate of 9.7% from 2018-2022.
• Prescriptions per Medicaid enrollee have trended steadily downward since the onset of the COVID-19 pandemic.
• Pre-rebate MCO costs per prescription were 38.2% below the corresponding fee-for-service (FFS) figure in 2018 but this differential was less than half as wide (16.6%) during 2022.
• Managed care organizations (MCOs) paid for 74.3% of Medicaid prescriptions during Q4 2021. This proportion dropped to 62.5% in Q4 2022, with the decrease largely attributable to California implementing a carve-out model in January 2022.

5-Slide Series

This edition presents our tabulations of Medicaid pharmacy cost and price trends. Some of our key findings:

Nationwide Medicaid pre-rebate costs per prescription increased at an annual average rate of 5.6% from 2012-2021, led by an 11.9% annual rate of increase for brand drugs. Average costs per brand drugs rose particularly sharply during recent years, rising 56 % (16% per year) from 2018-2021.
Keeping the mix of drugs constant so that price changes could be assessed, we found that drug prices rose 64% across all drugs that were on the market throughout the 2012-2021 timeframe.
During 2021, 52.1% of Medicaid’s pre-rebate prescription drug spending were attributable to medications with an average cost above $1,000 per prescription. This proportion was “only” 21.5% during 2012.

5-Slide Series

This edition quantifies the decrease in Medicaid prescription volume that has occurred during COVID, comparing usage during calendar years 2019, 2020, and 2021. The large decrease that has occurred – 16.4% from 2019 to 2021 on a per covered person basis — is highly concerning regarding its implications regarding the poverty population’s access to needed medications during the pandemic.

5-Slide Series

We were enlisted by the Anthem Public Policy Institute to assess the cost-effectiveness of different states’ approaches to managing Medicaid prescription drug benefit.  States were grouped into five cohorts depending on the degree to which their Medicaid prescriptions are paid for by MCOs or via the fee-for-service (FFS) setting – and by the degree of latitude MCOs have to manage the mix of drugs. We assessed 100% of Medicaid prescriptions across federal fiscal years 2018, 2019, and 2020.

Publication

States that employ Medicaid managed care organizations (MCOs) to pay for prescription drugs outperform states that rely on the fee-for-service (FFS) setting to control drug costs. Despite larger rebates in FFS, MCOs’ effective strategies to encourage…

Publication

The New Jersey Association of Health Plans enlisted the Menges Group to evaluate New Jersey’s Medicaid prescription drug costs and assess the potential impacts of a pharmacy carve-out approach, whereby the prescription drug benefit would be removed from the MCOs’ responsibility and paid for in the fee-for-service (FFS) setting. We also assess the impacts of two potential policy changes, including maintaining MCO responsibility for the prescription drug benefit but requiring the use of the same preferred drug list (PDL) and MCOs’ mandatory use of a single Pharmacy Benefits Manager (PBM) subcontractor.

We estimate that carving pharmacy benefits out of the MCO benefit package will cost the State of New Jersey $51 million in the first year, with cumulative state costs across the first five years of the carve-out totaling $454 million. Additionally, we find that due to a weakened ability to manage drug mix at the “front end,” moving to a uniform DHS-driven PDL will cost the State of New Jersey $3 million in the first year, with cumulative state costs across the first five years totaling $26 million. Finally, our analyses show that a policy approach of requiring all MCOs to use the same PBM is also unlikely to yield savings.

Publication

Virginia began implementing a Common Core Formulary within its Medicaid managed care program in 2017 for CCC Plus members and in 2018 for Medallion 4.0 members. The Virginia Association of Health Plans (VAHP) engaged The Menges Group to analyze the fiscal and programmatic impacts of this policy change. Our tabulations indicate that the change to the Common Core Formulary led to increased net (post-rebate) Medicaid costs of $13.2 million during calendar year 2019, including $5.5 million in additional state funds.

Publication

PCMA engaged The Menges Group to estimate the financial and programmatic value of managing the prescription drug benefit in the Medicaid managed care setting, comparing states that utilize MCOs – who contract with PBMs – for their prescription drug benefits to states that manage their prescription drug benefits in FFS. Using Medicaid prescription drug data reported by each state to the Centers for Medicare and Medicaid Services (CMS) for all Medicaid-paid pharmacy-dispensed prescriptions, we analyzed how prescription drug costs and usage vary depending on how prevalent managed care is in each state Medicaid program. We also analyzed the drug costs and usage within specific therapeutic drug classes.

Publication

The Pennsylvania Coalition of Medical Assistance MCOs engaged The Menges Group to estimate the fiscal impacts of switching to a uniform PDL in Pennsylvania and to assess the programmatic advantages and disadvantages of this policy change. Our analyses indicate that the Commonwealth of Pennsylvania and its taxpayers would incur significant costs if Pennsylvania adopts a uniform, state-determined Medicaid PDL. The state fund cost of this policy change is estimated at $81 million in the first year (FFY2020) and $442 million across the five-year timeframe FFY2020 – FFY2024. The programmatic dynamics of switching to a uniform PDL are also unfavorable. We encourage Pennsylvania policymakers to preserve the PDL latitude model within HealthChoices.

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