In 2005, state Medicaid programs will pay for over 18 percent of the nation’s quarter trillion dollar pharmaceutical market. Thanks to an excellent new analysis by Jim Verdier and colleagues at Mathematica Policy Research, we have new insights into cost and use patterns in Medicaid.

Some highlights:

● Average monthly Medicaid fee-for-service (FFS) pharmacy reimbursement for all beneficiaries nationally was $69, ranging from $43 in South Carolina to $165 in Connecticut.

● The monthly average was $154 for disabled beneficiaries, $129 for aged beneficiaries, $31 for non-disabled adults, and $12 for children.

● Generics accounted for 46 percent of all Medicaid FFS prescriptions nationally, ranging from 37 percent in New York to 52 percent in Utah.

● Anti-psychotics accounted for nearly 11 percent of total Medicaid drug spending, with antidepressants accounting for 7 percent. Anti-psychotic drugs were the top-ranked drug group in terms of total in 38 states, and ranked second in 9 other states and the District of Columbia.

Mathematica’s work, which was sponsored by the Centers for Medicare & Medicaid Services (CMS), also provides interesting information on the prescription drug use and costs of dual eligibles:

● Disabled Medicaid beneficiaries accounted for 58 percent of total Medicaid FFS reimbursement nationally, aged beneficiaries 28 percent, non-disabled adults 6 percent, and children 8 percent.

● Average national monthly FFS reimbursement for dual eligibles was $157, ranging from $109 in New Mexico to $315 in Colorado.

Dual eligibles accounted for 56 percent of Medicaid FFS pharmacy reimbursement in 1999, ranging from 39 percent in West Virginia to 90 percent in New Mexico.

● Average annual FFS pharmacy costs nationally for disabled dual eligibles under age 65 was $2,143. It was $1,431 for duals age 65 to 74, $1,447 for duals age 75 to 84, and $1,247 for duals age 85 and older.

● Dual eligibles in nursing homes accounted for 14 percent of Medicaid FFS pharmacy reimbursement, with the percentage ranging from 2 percent in South Carolina to 30 percent in Maryland.

● Medicaid residents in nursing homes received an average of 5 prescriptions per month, with the number ranging from 1 percent in the District of Columbia to 13 percent in Colorado.

To learn more, read Mathematica’s thoughtful issue brief (PDF) or check out the data tables.