Medicaid prescription drug spending grew by 24.6 percent in 2014—its highest rate of growth since 1986—primarily due to increased spending for hepatitis C drugs; it slowed to 13.6 percent in 2015, as higher rebates triggered by spending helped temper growth in 2014.
High prescription drug spending rates are of great concern to Medicaid officials at both the state and federal levels. This presentation provides an overview of current Medicaid prescription drug rebate and payment policy and describes some commonly cited causes of high drug prices. It concludes with a discussion of options available to federal and state policymakers that have the potential to mitigate drug expenditures.