Publications > Medicaid Prescription Drugs: Purchasing and Management

As New York policymakers direct their attention to redesigning the state’s Medicaid program, the administration of the pharmacy benefit will be a critical issue. Medicaid’s drug program is highly complex. It must comply with state and federal regulations, reimburse providers in many different delivery systems, and manage beneficiary populations with complex diseases — all while remaining affordable, accessible, and of the best quality possible. Not only is the benefit expensive—New York State’s Medicaid pharmacy spending reached nearly $2.7 billion in 2009—but expenditures are expected to continue to grow.

This new report from the Medicaid Institute explores the technical and policy decisions states can make when purchasing and managing prescription drugs in today’s Medicaid environment. It identifies best practices from around the nation and examines New York’s Medicaid prescription drug program in particular. The range of areas examined includes pharmacy program delivery systems, reimbursement logistics, drug product and rebate optimization, aggregate purchasing, and clinical program efficiency. The report also lays out how federal health reform affects the Medicaid drug benefit.

Prepared for the Fund by Mercer Government Human Services Consulting, this report is intended to help policymakers in New York and other states focus their attempts to achieve cost containment while ensuring access to benefits and maintaining quality of care.