{"id":19392,"date":"2020-05-20T11:31:02","date_gmt":"2020-05-20T15:31:02","guid":{"rendered":"https:\/\/avalere.com\/?p=19392"},"modified":"2022-09-08T16:26:51","modified_gmt":"2022-09-08T20:26:51","slug":"manufacturers-must-navigate-evolving-state-approaches-to-medicaid-drug-benefit-management","status":"publish","type":"post","link":"https:\/\/advisory.avalerehealth.com\/insights\/manufacturers-must-navigate-evolving-state-approaches-to-medicaid-drug-benefit-management","title":{"rendered":"Manufacturers Must Navigate Evolving State Approaches to Medicaid Drug Benefit Management"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text]Background<\/strong><\/p>\n

Under the Medicaid Drug Rebate Program (MDRP), manufacturers are required to provide mandatory rebates and, in exchange, states must cover rebated drugs. The MDRP governs coverage and rebate requirements for all outpatient drugs in Medicaid<\/a>, though states retain some flexibility in designing the drug benefit through preferred drug lists (PDLs) and utilization management (UM) policies, including prior authorization (PA) requirements.<\/p>\n

States consider drug net cost (after rebate) and clinical effectiveness to designate \u201cpreferred\u201d drugs within a drug class that often must be tried before a \u201cnon-preferred\u201d drug will be approved through the PA process. Manufacturers can often offer supplemental rebates to influence placement of their drug into preferred status on a PDL.<\/p>\n

States have 4 basic approaches to drug benefit management, depending on whether the state manages through fee-for-service (FFS), contracts with Medicaid managed care organizations (MCOs), and\/or whether the MCOs are responsible for coverage of drug claims and PDL management:<\/p>\n

Figure 1. State and Plan Controlled Pharmacy Benefit\u00a0<\/strong>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=”19400″ onclick=”img_link_large”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\n