Trends in Medicaid Prescription Drug Utilization and Payments, 1990-97

The rising cost of prescription drugs has caused public officials to restructure prescription drug coverage and payment policies in Medicaid. This study examines Medicaid utilization and payments for prescription drugs from 1990 to 1997. Medicaid prescription drug payments grew from $4.4 billion in 1990 to almost $12 billion in 1997, representing an average annual increase of 15.3 percent. In 1997 prescription drug payments per recipient were $1,379 for the blind and disabled, more than 10 times the amount for children. These findings will aid policymakers in setting prepaid plan rates for prescription drugs and monitoring access to care in Medicaid.