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States, Federal Government Could Save $30 Billion by Managing Medicaid Pharmacy More Like Medicare and Commercial Sector Programs
Date:12/6/2010

s are reimbursed for the actual medication ingredients (pills, capsules, etc.) is also higher, on average, in Medicaid FFS programs than in Medicare Part D or the commercial sector.

·Drug Utilization: The number of prescriptions dispensed per person is typically higher in Medicaid FFS programs than in Medicaid MCOs due to less effective controls on polypharmacy, fraud, waste, abuse, and other factors in the FFS setting.

Estimated Federal and State Medicaid Savings

If all state Medicaid programs used a market-based approach such that dispensing fees, ingredient costs, drug utilization, and generic drug dispensing were brought in-line with norms for Medicaid MCOs, Medicare Part D, and commercial payers, Lewin estimates that:

·Combined federal and state savings to the Medicaid program would total $30.3 billion over the next decade.

·Medicaid FFS prescription costs could be reduced by 14.8%.

·Per member per month (PMPM) costs for Medicaid FFS pharmacy benefits could be reduced by $12 in 2011 under optimal management.

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 210-plus million Americans.

The full report can be obtained at: http://www.lewin.com/content/publications/Medicaid_Pharmacy_Savings_Report.pdf


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SOURCE Pharmaceutical Care Management Association
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