July 21, 2010

Overspending on Multi-Source Drugs in Medicaid

The American Enterprise Institute for Public Policy Research released a report that found that in 2009, Medicaid spent an estimated $271 million on brand name drugs for which generic options were available. Use of a brand name medication rather than a generic was most common for 20 compounds comprising 139 delivery or dosage types; spending on those 20 compounds totaled $1.76 billion; if generics had been used for those 20 compounds, spending would have been 15% less or $1.49 billion. Most (94%) of the use of the name brand rather than the generic was concentrated among 12 compounds. Nearly three-quarters of the time (73%) failure to substitute a generic took place for new generics that launched in 2008 or 2009.