Office of Program Policy Analysis and Government Accountability
Office of Program Policy Analysis and Government Accountability

Inflated Pricing and Confidential Information Prevent Medicaid from Ensuring Lowest Prescription Drug Prices

Report 06-07, January 2006




Report Summary

  • Medicaid prescription drug expenditures, which were $2.5 billion in Fiscal Year 2004-05, have nearly doubled since Fiscal Year 2000-01, growing an average of 15.1% per year. Legislative actions have helped to slow the growth rate of these expenditures, which rose at an average rate of 21.2% annually during the previous five-year period (Fiscal Years 1995-96 to 1999-00). Much of this slowed growth has been the result of specific cost-containment actions directed at lowering the price that Medicaid pays for drugs.
  • However, the state's ability to obtain the lowest possible prices for prescription drugs is hindered by inflated manufacturer pricing information and lack of access to confidential information. The Legislature should consider requiring pharmaceutical manufacturers to submit more accurate pricing information to the Agency for Health Care Administration (AHCA) as well as requiring AHCA to strengthen cost-containment strategies to achieve lower prescription drug prices.


Related Reports
  1. Legislature Could Consider Options to Address Pharmacy Benefit Manager Business Practices
    Report 07-08 February 2007
  2. Progress Report: Medicaid Should Improve Cost Reduction Reporting and Monitoring of Health Processes and Outcomes
    Report 04-53 August 2004
  3. Progress Report: Changes to Medicaid Preferred Drug List Requirements and Competitive Bidding Pharmacy Contracts Could Save an Additional $86.6 Million in 2003-04
    Report 03-27 April 2003
  4. Growth in Medicaid Prescription Drug Costs Indicates Additional Prudent Purchasing Practices Are Needed
    Report 01-10 February 2001
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
social services, health, medicaid, pharmaceutical, drugs, drug pricing, pharmacy reimbursement, medicaid drug rebates, average wholesale price, average manufacturer price, wholesale acquisition cost, medicaid state rebates, medicaid drug purchasing pool, generic drugs, brand name