Medicaid Spending on Outpatient Drugs Has Doubled -- MEDICA - World Forum for Medicine

The increase reflects a rapid uptake of newer classes of drugs, which are often more expensive. The increase also reflected rapidly growing spending on behalf of disabled adults, including low-income persons with serious mental illnesses.

Prescriptions for newer classes of drugs included antidepressants, COX-2 inhibitors, proton pump inhibitors and cholesterol-lowering medications. For example, the number of Medicaid enrollees taking antidepressants rose by 50 percent which helped fuel a 130 percent rise in Medicaid spending for those drugs during the period. Antidepressants and all other psychotherapeutic drugs constituted the largest category of drugs prescribed to Medicaid enrollees in 2002, and total spending for all psychotherapeutic drugs rose 127 percent between 1997 and 2002.

In addition, annual Medicaid spending on drugs for disabled adults ages 19 to 64 grew 97 percent during the period while drug spending for all Medicaid enrollees 65 and older rose 81 percent, from $3.5 billion to $6.3 billion. Furthermore, disabled adults accounted for 47 percent of the Medicaid enrollees who were prescribed antidepressants – an increase of 37 percent between 1997 and 2002.

“This study helps pinpoint the patterns that have been driving significant increases in Medicaid drug spending,” said AHRQ Director Carolyn M. Clancy, M.D. “These data help identify classes of medications for which more evidence is needed on the comparative effectiveness of new drugs. This comparative evidence has the potential to help state and federal policymakers identify circumstances where costs could be safely reined in without affecting the quality of medical care for Medicaid enrollees.”; Source: Agency for Healthcare Research and Quality (AHRQ)