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


Medicaid provides health coverage for millions of Americans, including many with substantial health needs who rely on Medicaid drug coverage for both acute problems and for managing ongoing chronic or disabling conditions. (Medicaid beneficiaries who also have Medicare receive drug coverage through Medicare). Though optional, all states provide pharmacy benefit coverage and administer the benefit in different ways within federal guidelines regarding, for example, pricing and rebates. To better understand how the Medicaid pharmacy benefit is administered across the states, KFF and Health Management Associates conducted a survey of all 50 states and the District of Columbia (DC) in 2019. The survey was designed to capture information on state policies and strategies for managing the pharmacy benefit as well as planned changes for FY 2020 and future priorities and challenges.

Report findings are drawn from a survey of Medicaid officials in all 50 states and the District of Columbia conducted by KFF and Health Management Associates (HMA). The survey was conducted from June through December 2019 via a survey sent to each state Medicaid director in June 2019. The survey instrument is included as an appendix to this report. The District of Columbia is counted as a state for the purposes of this report; the counts of state policies or policy actions that are interspersed throughout this report include survey responses from 50 states (including DC). Utah did not respond. This report examines Medicaid pharmacy policies in place or implemented in FY 2019, policy changes implemented at the beginning of FY 2020, and policy changes for which a definite decision has been made to implement in FY 2020 (which began for most states on July 1, 2019). Policies adopted for the upcoming year are occasionally delayed or not implemented for reasons related to legal, fiscal, administrative, systems, or political considerations, or due to delays in approval from CMS.
Executive Summary Pharmacy Benefit Administration

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