"Our report takes a retrospective look at data from the FFS programs we
administered from 2014 through 2015, and identifies the tools and
practices that enabled state
Key findings from the
The increase in net cost per claim - the most efficient metric by
which to measure Medicaid FFS trend - from 2014 to 2015 was
$1.26, or three percent year-over-year, while the increase in gross cost per claim was $9.17or 10.7 percent. The net cost per claim was impacted largely by strategies such as preferred drug lists (PDL), utilization management, clinical criteria and brand-over-generic opportunities, that helped mitigate accelerating drug trend in this population.
- Federal and supplemental rebates played a large role in lowering the net cost of pharmacy expenditures, as well as selection of brand-over-generic preferences.
- Factors outside of the PDL program controls, such as state laws restricting or limiting a state's ability to manage specific high-touch classes, had a significant influence in determining the overall cost effectiveness of a pharmacy program.
"By collaborating with our state Medicaid FFS client base, Magellan Rx Management has been able to show that leveraging clinical and financial strategies can result in real, demonstrable cost savings in FFS programs, while ensuring exceptional efficacy-based care for individuals," said Brown.
Based on an analysis of the data available, Magellan Rx Management
recommended the following strategies to enhance
- States should examine practices around PDL restrictions of certain classes. As always, PDL reviews must be complemented by appropriate clinical criteria.
States should make decisions around the inclusion of certain drugs at
the net cost level, as opposed to the gross cost level, based on the
various federal and supplemental rebates available to
States should consider supplemental rebate negotiation and evaluation,
as well as net cost monitoring, as strategies to provide enhanced cost
savings. Supplemental rebate negotiation and evaluation saved states
$1.3 billionfrom 2014 through 2015, while preferring brand drugs over their generic equivalents saved states $86 millionin the fourth quarter of 2015 alone.
"Medicaid pharmacy program administrators are consistently looking for
ways to improve care while judiciously appropriating taxpayer funds, in
an area where spend is driven by many outside factors," said Brown.
"Magellan Rx Management has an extensive history managing
Leaders from Magellan Rx Management will be hosting a webinar focused on
the findings and highlights of the Medicaid Trend Report at
Magellan Rx Management is a full-service PBM that specializes in solving complex pharmacy challenges for its customers by developing and executing smart solutions that leverage industry-leading experience and technology to improve quality and costs across the employer, third-party administrator, broker, managed care, government, Medicaid and Medicare Part D markets. With proven clinical expertise, Magellan Rx Management delivers customized programs to address clients' most challenging clinical demands by engaging patients and providers to deliver improved health outcomes while reducing costs. As a pioneer in specialty and medical pharmacy management, Magellan Rx Management delivers consistent, proven quality and cost savings in one of the most complex and rapidly growing areas healthcare.
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