Impact of Medicaid discounted average wholesale price reimbursement on pharmacists' drug product selection

Third party prescription reimbursement programs began with the Medicaid program in 1965. During the 1970's health care costs increased at a rate above the consumer price index. During this time the Federal government has sought programs to control the cost of prescription ingredient costs in an effort to lower its cost of providing medical service. The latest program formulated by the Federal government mandated state agencies establish a more accurate estimate of pharmaceutical providers' medication acquisition cost other than the Average Wholesale Price. The Nebraska Department of Social Services formulated a program for reimbursement of ingredient cost for prescriptions based on AWP less 8.79% for all products not listed with a Maximum Allowable Cost or State Maximum Allowable Cost.;Because the discount off AWP for generic products may be greater than brand name products, pharmacies may have a financial incentive to dispense generic products. This incentive may cause pharmacists to alter their dispensing behavior and drug product select more generic products.;This study analyzed the dispensing pattern over a 30 month period (7/85-12/87) of medication products that had generic equivalents and no other government cost containment programs other than the discounted AWP. Regression analysis was employed to determine if there was a change in pharmacists' dispensing behavior after the policy change. The results indicate that there was an apparent change in pharmacists' dispensing behavior in 29 of the 45 (64.4%) medications in the study. A single regression analysis of data from all the medications was also performed in an attempt to determine if an overall change in the dispensing behavior of pharmacists existed. The results did not reveal any significant results.;The results were also non-statistically compared with the same products dispensed in Oklahoma, a state that did not employ this type of reimbursement policy. The comparison revealed similar types of changes in dispensing behavior may have occurred in Oklahoma.