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— Mark

August 3, 2016

Hydrocodone-acetaminophen (generic Vicodin) is the most frequently prescribed drug in Medicaid from 2014 to 2015, according to a new issue brief released by the Kaiser Family Foundation

The top five most costly drugs to Medicaid currently include three specialty medications, all antivirals and all manufactured by Gilead: the hepatitis C drugs sofosbuvir (Sovaldi) and ledipasvir-sofosbuvir (Harvoni), and the HIV combination therapy tenofovir disoproxil-emtricitabine (Truvada),

Specialty drugs represent 34% of the 50 most costly drugs to Medicaid, but only 6% of Medicaid outpatient drugs overall, according to the report, which used data from the Centers for Medicare & Medicaid Services for 2014 to 2015 to identify those top 50 drugs.

Aggregate drug costs to Medicaid reflect both the frequency of a drug’s overall use and the cost of the drug per prescription. In fact, the report noted that more than half (28) of the most costly drugs are not as expensive as the top five, but are prescribed most often (in the top 10th percentile of prescriptions).

The analysis noted that the Medicaid program dwarfs other public or private insurers with more than 70 million beneficiaries, many of them with poorer health than people with private insurance coverage. That translated into $27.3 billion in Medicaid spending on outpatient drugs in 2014.

Katherine Young, a senior research analyst with the foundation’s Kaiser Commission on Medicaid and the Uninsured, a co-author of the issue brief, said this finding surprised her.

“While I knew prescription level matters, I had not been expecting there to be so many drugs that weren’t necessarily very expensive at the prescription level, but were so heavily prescribed that they were among the top 50 most costly drugs. While the cost of the drug does matter, it should be considered in combination with how often that drug is prescribed.”

An additional 17 drugs were both highly prescribed and expensive. Seven of these, including Truvada, are antiretroviral agents. Another, aripiprazole (Abilify, Otsuka America)—a medication used to treat depression, bipolar disorder and schizophrenia—rounds out the list of the top five most costly drugs, and is the single most costly drug to Medicaid.

Nearly three-fourths of the 50 most costly drugs fall into five drug groups, the most prevalent of which (20%) is antivirals. Asthma medications and bronchodilators represent 16% of the most costly drugs; drugs for attention deficit hyperactivity disorder account for another 14%; antipsychotic and antimanic drugs, 12%; and antidiabetics, 10%.

Exclusivity was another factor that influenced drug cost for Medicaid. Single-source or brand drugs represented 94% of the top 50 drugs, but only 45% of Medicaid outpatient drugs overall.

“In terms of reining in drug spending, I think it’s useful to methodically look at what factors are causing certain drugs to be so costly to the Medicaid program, so that we can educate the public and policymakers about what are the driving issues,” Ms. Young said.

—Gina Shaw


Abott Northwestern Hospital
800 East 28th Street,
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North Memorial Medical Center
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