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Medicaid Pharmacy Cost Trend Increases Despite Drop in Utilization

Analysis  |  By Jack O'Brien  
   September 17, 2019

One of the most notable data points was the nearly flat rate for average claim cost, increasing 0.8%, compared to -4.4% in 2017.

The net cost per claim for specialty and traditional prescription drugs increased last year despite a decline in utilization, according to Magellan Health's annual Medicaid pharmacy trend report released Tuesday morning.

Net claims for specialty drugs increased by $27.02 per claim, while traditional drugs rose $2.30 per claim. These increases were smaller compared to the change in gross costs per claim, which rose 4% year-over-year.

Still, utilization dropped in both categories, with specialty drugs declining 5.5% while traditional drugs fell 5.2%. 

One of the most notable data points was the nearly flat rate for average claim cost, increasing 0.8%, compared to -4.4% in 2017.

The data is a part of the growing conversations among lawmakers at the state and federal level seeking to provide relief from the high cost of specialty prescription drugs. 

Related: Magellan Produces Mediocre Earnings as CEO Announces Retirement

The Magellan report found that the overall net trend is moving in a positive direction, aided by the specialty net trend inching up to 6.1%.

However, that metric still trails the 20.5% net trend from when the report was first released in 2016.

For its part, the traditional net trend improved from -5.1% to -2.6%, declining at slower pace than it had in previous years.

In a related point, the Magellan report ties the 1.5% increase in federal rebates to the 5.6% increase in gross cost per claim for brand names last year.

Meanwhile, the gross cost per claim for generic drugs was -4.3%, even though the federal rebate fell from 13.5% in 2017 to 11.4% in 2018.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.


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