How State Medicaid Programs are Managing Prescription Drug Costs: Results from a State Medicaid Pharmacy Survey for State Fiscal Years 2019 and 2020

States’ management of the Medicaid pharmacy benefit in FY 2019-2020 reflects ongoing state efforts to adapt and respond to the ever-changing prescription drug landscape within the limits of federal law. In response to the increasing roles played by MCOs and PBMs in managing the Medicaid pharmacy benefit, states are increasingly expanding the scope of their clinical and administrative oversight by imposing greater controls over MCO PDL and PA policies and the pricing and reporting arrangements MCOs negotiate with their PBM subcontractors. Conversely, a few states have recently chosen to carve pharmacy benefits out of their managed care arrangements entirely or are considering doing so. A small but growing number of states are also looking to negotiate value-based arrangements with manufacturers to increase supplemental rebates. Looking ahead, states remain concerned about new, high-cost therapies and are prioritizing further reforms to MCO pharmacy policy. Drug pricing has been prominent in national policy debates and lawmakers at both the state and federal levels continue to show interest in efforts to control costs that may have implications for the Medicaid program.

This work was supported in part by Arnold Ventures. We value our funders. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.

Challenges and Priorities in FY 2020 and Beyond Appendix

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