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Growth in Medicaid Prescription Drug Costs Indicates Additional Prudent Purchasing Practices Are Needed, Report No. 01-10, February 2001
 
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  • Over the past few years the Legislature has enacted several prescription drug cost control initiatives to curtail inappropriate prescribing, detect fraud, reduce prescription prices, and increase drug manufacturer rebates.
  • However, continued rapid growth in Medicaid spending for prescription drugs is a major factor driving projected deficits in the Medicaid budget in Fiscal Years 2000-01 and 2001-02.  Most of the growth is due to an increase in the average cost of prescriptions driven primarily by doctors switching to higher-cost drugs.
  • Despite obtaining lower retail drug prices than other state Medicaid programs, Florida’s prescription drug costs per recipient are among the highest.
  • To help control the rapid increases in the cost of Medicaid prescriptions and to promote effective drug therapies for the least cost, we recommend that the Legislature authorize the Agency for Health Care Administration to develop a mandatory preferred drug list and negotiate supplemental rebates, 
  • direct the agency to develop and implement strategies to encourage compliance with using the preferred drug list, and 
  •  require the agency to competitively bid contracts for Medicaid pharmacy networks.
  • These steps could save up to $306.1 million annually in Medicaid prescription drug costs, of which $113.1 million would be state general revenue savings.

Which Government Program Summaries contain related information?

Medicaid Health Care Services
Agency for Health Care Administration

What other OPPAGA-related materials are available?

  • Report No. 06-07 Inflated Pricing and Confidential Information Prevent Medicaid from Ensuring Lowest Prescription Drug Prices, published in January 2006.
  • Report No. 03-27 Progress Report: Changes to Medicaid Preferred Drug List Requirements and Competitive Bidding Pharmacy Contracts Could Save an Additional $86.6 Million in 2003-04, published in April 2003.
  • Report No. 03-11 Special Review: Legislative Options for County Share of Medicaid Nursing Home Costs, published in February 2003.
  • Report No. 01-61 Justification Review: Expected Medicaid Savings Unrealized; Performance, Cost Information Not Timely for Legislative Purposes, published in November 2001.
  • Report No. 01-39 Justification Review: Medicaid Program Integrity Efforts Recover Minimal Dollars, Sanctions Rarely Imposed, Stronger Accountability Needed, published in September 2001.
  • Report No. 01-27  Justification Review: Medicaid Disease Management Initiative Sluggish, Cost Savings Not Determined, Design Changes Needed, published in May 2001.

Copies of this report in print or alternate accessible format may be obtained by telephone (850/488-0021), by FAX (850/487-9213), in person, or by mail (OPPAGA Report Production, Claude Pepper Building, Room 312, 111 W. Madison St., Tallahassee, FL 32399-1475).
e-mail address: oppaga@oppaga.fl.gov


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