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Analysis Finds Specialty Drugs Rank High Among Medicaid’s Most Costly Outpatient Drugs

Costly specialty drugs, such as those used to treat Hepatitis C and HIV, are among the most costly medications in state Medicaid programs, chiefly because of their high prices for a course of treatment, according to a new Kaiser Family Foundation analysis of Medicaid’s most costly outpatient drugs.

Abilify, an antiphsychotic used in the treatment of schizophrenia and bipolar disorder, was the most costly drug in state Medicaid programs overall in the new analysis, which examines the 50 most costly drugs to Medicaid before rebates (which bring down the final cost to the program and vary across drugs) between January 2014 and June 2015. The analysis explains that drugs can be costly to the program because each prescription costs a lot or because they are heavily prescribed — or both.

Hepatitis C drugs Sovaldi and Harvoni rank second and fourth in the analysis, mainly because of the high price for a course of treatment. These drugs cure Hepatitis C in the vast majority of patients and their use spiked over the period of the analysis following their introduction.

With over 70 million beneficiaries, many with complicated health needs, Medicaid is one of the largest providers of prescription drugs in the U.S., spending $27.3 billion on outpatient drugs (after rebates) in 2014. In addition to Abilify, Sovaldi and Harvoni, the top 5 most costly drugs for Medicaid overall before rebates included Vyvanse, used to treat ADHD, and Truvada, which is used to treat HIV.

The most prescribed drug in Medicaid programs was the opioid hydrocodone-acetaminophen, the generic form of the painkiller Vicodin. It ranked 37th in total cost before rebates due to its more modest price compared to other medications on the list.

The analysis uses State Drug Utilization Data from CMS and Wolters Kluwer Clinical Drug Information data to examine which drugs were the most costly for Medicaid, and why. It includes detailed breakouts of the most costly drugs overall, the most frequently-prescribed and the most expensive per prescription.  The analysis also discusses policy implications as state Medicaid officials balance access to drugs with the cost to their programs.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.