Trends and current drug utilization patterns of Medicaid beneficiaries

Health Care Financing Review, Spring, 2006 by Terry R. Lied, Julio Gonzalez, Wendy Taparanskas, Tejas Shukla

Table 2 compares the percent change in the base years' 1982-1984 MCPI with the percent change in the mean prescription reimbursement between CYs 1994-2003 and adjusts the mean prescription reimbursement based on 2003 dollars. Between CYs 1994-2003, the percent change in the mean prescription reimbursement outstripped the percent change in MCPI, often by impressive margins. However, by 2003 the difference between the percent change in the MCPI and the percent change in the mean Medicaid prescription reimbursement was only about i percent (3.87 versus 4.91). In 1994, the mean reimbursement in 2003 dollars was $35.68. By 2003, the mean reimbursement was $59.85 (in 2003 dollars). Therefore, over this time period the mean reimbursement had increased by $24.17 in constant 2003 dollars, an increase of 68 percent. Figure 1 presents the relationship between percent changes in the MCPI and mean prescription reimbursements between CYs 1994 and 2003. Figure 2 illustrates the trend in mean Medicaid prescription reimbursements between CYs 1994 and 2003 in both nominal and constant 2003 dollars.

Table 3 lists the number of prescriptions, percent of total prescriptions, total reimbursements, percent of total reimbursements, and the mean reimbursement per prescription for the top 40 drugs, in terms of total reimbursements, and for all other drugs for CYs 1994-2003 (4). The mean reimbursement amount per prescription was greater for the top 40 drugs compared to other drugs during this 10-year period. In 1994, the mean reimbursement amount per prescription was $45 for the top 40 drugs compared to $21 for all other drugs. By 2003, the mean reimbursement amount per prescription was $131 for the top 40 drugs compared to $42 for all other drugs. The top 40 drugs accounted for 34 percent of total drug reimbursements in 1994 and 43 percent of total drug reimbursements in 2003. With many more drugs available in 2003 compared to 1994, this result suggests that the top drugs had a significantly greater share of the market in 2003 than they did in 1994. Figure 3 displays total reimbursements for the top drugs and for all other drugs for CYs 1994-2003. Reimbursements for the top 40 drugs as a percent of total drug reimbursements gradually and steadily increased between 1994 and 2001, but showed a very slight decline between 2001-2002, and 2002-2003.

[FIGURE 3 OMITTED]

Table 4 presents the total number of prescriptions and reimbursements by drug group for 2003. Mean reimbursement is also presented. Central nervous system (CNS) drugs (primarily used to treat psychiatric conditions) had the highest total reimbursements of all groups at approximately $7.3 billion. These drugs accounted for more than 21 percent of the total drug reimbursements in 2003. Cardiovascular agents were first in terms of total prescriptions and second in terms of total reimbursements at approximately $4.1 billion or 12 percent of total reimbursements. Anti-infective agents were third in terms of reimbursement at $3.4 billion followed by analgesics and anesthetics at nearly $2.9 billion, respiratory agents at $2.8 billion, and endocrine and metabolic drugs at just short of $2.8 billion. Gastrointestinal agents followed closely at $2.7 billion and neuromuscular drugs were not too far behind at a little more than $2.4 billion.