Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending?

28 Pages Posted: 9 Apr 2012

See all articles by Kosali Ilayperuma Simon

Kosali Ilayperuma Simon

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); National Bureau of Economic Research (NBER)

Sharon L. Tennyson

Cornell University - Department of Policy Analysis & Management (PAM)

Julie Hudman

affiliation not provided to SSRN

Date Written: Spring 2009

Abstract

We present the first systematic analysis of state policies limiting prescription drug access under Medicaid during 1990–2004, documenting their impact on states’ Medicaid prescription spending growth. We see substantial variation in the number and type of policies used by states, but a clear upward trend in restrictions over time. Analysis of state level annual spending growth shows that these restrictions have in general helped contain Medicaid prescription drug costs and that some approaches, such as the use of preferred drug lists (PDLs) and tiered copayment systems, may have been more effective than others.

Suggested Citation

Simon, Kosali Ilayperuma and Tennyson, Sharon L. and Hudman, Julie, Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending? (Spring 2009). Risk Management and Insurance Review, Vol. 12, Issue 1, pp. 39-66, 2009, Available at SSRN: https://ssrn.com/abstract=2036150 or http://dx.doi.org/10.1111/j.1540-6296.2009.01153.x

Kosali Ilayperuma Simon (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sharon L. Tennyson

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

252 MVR Hall
Ithaca, NY 14853
United States
607-255-2619 (Phone)
607-255-4071 (Fax)

Julie Hudman

affiliation not provided to SSRN

No Address Available

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