Trends in Medicaid fee-for-service outpatient drug utilization, expenditures, and pharmacy reimbursement rates (2010-2012)

Purpose: To assess drug utilization and expenditure trends in Medicaid fee-for-service program during the period 2010 - 2012 in the United States of America. Methods: A retrospective, descriptive analysis of the trend in drug utilization and expenditures in the Medicaid fee-for-service (FFS) program was performed using Medicaid state drug utilization data provided by Centers for Medicare and Medicaid Services (CMS) in the United States. Descriptive analyses were performed for all variables in the study. Association between prescription-drug utilization and reimbursement rate was examined using a linear regression model. Results: The results indicate that prescription-drug utilization of Medicaid FFS program decreased by 20 % during the period (2010 - 2012) as also drug expenditure during the same period. Although constituting nearly 70 % and about 75 % of the total drug utilization in 2010 and 2012, respectively, generics represent only around 18 % of the total drug expenditures. No statistically significant association was found between total expenditures and the reimbursement rate. Conclusion: FFS Medicaid drug expenditures decreased from 2010 to 2012 mainly due to a reduction in the total number of prescriptions as also the prices of generic drugs. Thus, higher utilization of generic drugs may offer substantial savings to Medicaid programs at the state level.