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Utilization and Spending Trends in Medicaid Outpatient Prescription Drugs

 | Published on 3/5/2019

Utilization and Spending Trends in Medicaid Outpatient Prescription Drugs


This analysis examines Medicaid outpatient prescription drug utilization in terms of prescriptions and spending before rebates over the 2014 to 2017 period. Key takeaways include:

- Although outpatient drugs account for a small share of Medicaid spending, spending on this service before rebates increased by 21% in 2015 and grew an additional 11% in 2016. Though it grew more slowly in 2017, it is expected to grow faster than most other Medicaid services in the next 10 years. Because states must balance their budgets, ongoing increased spending on Medicaid prescription drugs is a policy concern, prompting states to consider ways to reduce drug spending.

- Utilization, measured in terms of the number of prescriptions, increased 21% from 2014 to 2017, with faster growth from 2014-15 as the ACA was implemented and slower growth in later years. The ten most frequently prescribed drug groups are the same every year, although the order changes.

- Opioid analgesics were the most prescribed drug group in 2014, but opioids as a share of total number of Medicaid prescriptions declined over time. In addition, buprenorphine composes a growing share of opioid analgesic prescriptions during the period.

- By 2017, antidepressants were the most prescribed drug group, in part reflecting significant behavioral health needs among the Medicaid expansion population.

- Medicaid spending before rebates increased 39% from 2014 to 2017; similar to use, growth was with faster from 2014-15 and slower growth in later years. Eight of the ten most costly drug groups are the same every year, although the order changes.

- Antivirals were the most costly drug group before rebates every year from 2014 to 2017, accounting for more than 13% of Medicaid outpatient drug spending in 2017. Spending on antivirals, and especially hepatitis C drugs, is disproportionate to their utilization.

- Antidiabetics grew as a share of spending becoming the second largest share by 2017. This increase is largely due to the price increases of insulins over this time period.

- Generic drugs accounted for the vast majority of prescriptions over the 2014 to 2017 period, while brand drugs accounted for the vast majority of spending. Though the volume of generic drugs has increased faster than brand, brand drugs account for a growing share of spending over time. This pattern reflects national trends caused by the launch of expensive new drugs during the period.

- Although biologics accounted for less than one percent of prescriptions, they accounted for more than ten percent of spending before rebates each year from 2014 to 2017.

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