Report: Medicaid Wasted $329 Million on Brand-Name Drugs in 2009

Alex Brill, member of conservative think tank organization American Enterprise Institute, has blamed Medicaid in a new report for wasting $329 million in 2009 on purchasing brand-name drugs instead of generics.

The antipsychotic Risperdal, commonly used in nursing homes, could have saved Medicaid $60 million alone if prescribed in its generic form, according to the report.

“[P]olicymakers should consider policies that promote lowest-cost products among multi–source drugs,” Brill wrote in his report. “Currently, only sixteen states require pharmacists to dispense the lowest–cost multi–source drugs to Medicaid patients.”

Brill also emphasized the need for a prompt solution, given the expansion of Medicaid eligibility in 2014 under health reform as well as continued pressure on state budgets. “The subsequent increase in the size of the Medicaid drug program will result in greater waste if new policies are not implemented,” he concluded.

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Full report: “Overspending on Multi‐Source Drugs in Medicaid” (PDF format)