Report Details Increases in Medicaid Prescription Drug Spending

FOR IMMEDIATE RELEASE: November 13, 2018
FOR MORE INFORMATION: Jeff Van Ness, (202) 204-7515;


WASHINGTON—A new report from the Association for Community Affiliated Plans (ACAP) details trends in Medicaid prescription drug spending. It finds that in the past six years, the proportion of prescriptions paid for by managed care plans has risen dramatically—and that in 2017 Medicaid managed care plans saved the program about a quarter of its per-prescription drug spend, compared with fee-for-service Medicaid.

The report, authored by The Menges Group, analyzes data from the Centers for Medicare & Medicaid Services (CMS). The analysis found that the proportion of Medicaid prescriptions paid by managed care plans rose more than threefold between 2011 and 2017—from 22.4 percent to 71.9 percent.

Medicaid health plans also provide the program large-scale savings through sound management of the pharmacy benefit: in 2017, the average post-rebate cost per prescription for a Medicaid managed care organization (MCO) was $37, compared with $50 for fee-for-service Medicaid.

“Managed care lives up to its name with respect to managing prescriptions,” said ACAP CEO Margaret A. Murray. “The data show how effective Medicaid managed care plans can find the best value, and are a powerful example of how plans deliver value for patients and for the taxpayers who fund the program.”

The report also documents in stark detail the rising role of high-price medications in overall Medicaid pharmacy expenditures.   Prescription drugs with an average pre-rebate cost of $1,000 or more represented 19.0 percent of all Medicaid pre-rebate spending in 2011; by 2017 this proportion had jumped all the way to 43.9 percent.

“Medicaid’s rebate formula protects the program well against rapid price increases for any given drug, but offers only modest protections against high introductory costs of new drugs,” added Joel Menges, Chief Executive Officer of The Menges Group. “Public policymakers need to identify and address situations where the marginal costs of a newly introduced drug exceed its marginal benefits.”

Read the full report here.

About ACAP
ACAP represents 63 not-for-profit Safety Net Health Plans in 29 states, which collectively serve more than 21 million people enrolled in Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), and other public health programs. For more information, visit

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