AHRQ Study: Medicaid Spending on Outpatient Drugs More Than Doubled in Recent Years

Medicaid spending for outpatient prescription drugs increased by 20 percent per year on average from 1997 to 2002, jumping from $11.6 billion to $23.7 billion during that period, according to a new study by HHS' Agency for Healthcare Research and Quality. The increase reflects a rise in both the number of prescriptions written for Medicaid enrollees-from 301 million in 1997 to 429 million in 2002-and the rapid uptake of newer classes of drugs, which are often more expensive The increase also reflected rapidly growing spending on behalf of disabled adults, including low-income persons with serious mental illnesses. "This study helps pinpoint the patterns that have been driving significant increases in Medicaid drug spending,” said AHRQ Director Carolyn M. Clancy, M.D. “These data help identify classes of medications for which more evidence is needed on the comparative effectiveness of new drugs. This comparative evidence has the potential to help State and Federal policymakers identify circumstances where costs could be safely reined in without affecting the quality of medical care for Medicaid enrollees."