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State strategies to address medicaid prescription spending: negotiated pricing vs price transparency

Published online by Cambridge University Press:  30 April 2020

Shihyun Noh Open the ORCID record for Shihyun Noh [Opens in a new window] ,
Christian L. Janousek  and
Ji Hyung Park
Shihyun Noh*
Affiliation:
Department of Public Administration, State University of New York College at Brockport, Rochester, New York, USA
Christian L. Janousek
Affiliation:
University of Nebraska at Omaha, Nebraska, USA
Ji Hyung Park
Affiliation:
Department of Political Science, James Madison University, Harrisonburg, Virginia, USA
*
*Corresponding author. Email: snoh@brockport.edu
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Abstract

This research longitudinally examines the association between levels of state Medicaid prescription spending and the state strategies intended to constrain cost increases: the negotiated pricing strategy, as indicated by state rebate programs, and the price transparency strategy, as indicated by state operation of All-Payer Claims Databases. The findings demonstrate evidence that state Medicaid prescription spending is influenced by the negotiated pricing strategy, especially Managed Care Organization (MCO) rebates under the Patient Protection and Affordable Care Act, but not influenced by the price transparency strategy. State decisions for MCO rebates, such as carving prescription benefits into managed care benefits, were effective in containing levels of Medicaid prescription spending over time, while other single- and multi-state rebate programs were not. Based on these findings, state policymakers may consider utilizing the MCO rebate program to address increases in Medicaid prescription spending.

Keywords

Affordable Care ActAll payer claims databasesMedicaid prescription spendingNegotiated pricingPrice transparency
Type
Article
Information
Health Economics, Policy and Law , Volume 16 , Issue 2 , April 2021 , pp. 201 - 215
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Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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