The economic effect of an expansion of pharmacy benefits on total health care expenditures by a state Medicaid program

Prescription medications are one of the top three drivers of Medicaid expenditures and the quickly rising expenditures have been a strain on state budgets. This study evaluated the economic effect on health expenditures for the Oklahoma Medicaid program from a 2004 pharmacy benefit change that increased the monthly prescription limit in Oklahoma from three to six. It was a retrospective administrative database analysis using the Oklahoma Health Care Authority (OHCA) pharmacy and medical claims. It incorporated a pre/post design that evaluated claims for the 12 months before and after the January 1, 2004 implementation date for continuously eligible recipients who were subject to the pharmacy benefit limitations for the entire study period. Recipients who met the inclusion criteria were identified and their pharmacy and medical claims were isolated from the databases, cleaned and verified for reliability. Although it had been hoped that the increase in pharmacy expenditures associated more access to medications would be met with a reciprocal decrease in medical expenditures, it was not found in this study.