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Analysis

Medicaid Pharmacy Cost Trend Increases Despite Drop in Utilization

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 finance editor at HealthLeaders, a Simplify Compliance brand.


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