States Scramble to Drive Down Medicaid Drug Costs

A little-known provision of the 2010 health care law has states and their governors scrambling to take advantage of potential savings in how states distribute medication to Medicaid patients. The Affordable Care Act (ACA) allows states to receive drug rebates even if they move their Medicaid prescription benefit to managed-care organizations. The federal government has also asked states to fix the wide disparities in dispensing costs for drugs distributed through Medicaid, says USA Today.

That has created a rush by states and businesses to capitalize on the changes as evidence shows they are having an effect.

For the first time, New York has reduced Medicaid spending.

The ACA allowed states to expand their Medicaid programs to cover more people. Some of the nation’s most populous states, such as California and New York, have expanded, while others, such as Texas, have not. Expansion can provide a windfall to any drug provider in Medicaid.

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