Kentucky Medicaid Spending on Prescriptions ‘Spirals’ Up After Laws Back Use of Brand-Name Drugs

Kentucky's Medicaid spending on pharmaceuticals rose 31% last year after two state laws "virtually eliminated" state Medicaid officials' ability to limit use of the "newest and most expensive" brand-name prescriptions, the AP/Cincinnati Enquirer reports. The first law, enacted in 1998, requires Medicaid to cover all drugs without restrictions for the first year they are on the market; the second law, passed last year, requires Medicaid to cover all "similar" drugs without restrictions when a new drug enters the market. For the fiscal year that ended June 30, state spending on prescriptions rose to $568 million from $433 million a year earlier, following a rise of 24% during the previous fiscal year. Due to the spending increases, state Sen. Daniel Mongiardo (D) is pushing for repeal of the two laws, warning that the program will otherwise face a projected shortfall of $280 million this fiscal year. "We're either going to have to get pharmaceutical costs under control or cut patients out of Medicaid," Mongiardo said.

Industry Lobbying
The AP/Enquirer reports the two laws were "pushed through" the Legislature at the urging of the state's "powerful" pharmaceutical lobby, which is now defending the measures against attempts to revoke them. An attempt to repeal the legislation passed the state House earlier this year but stalled in the Senate after state Sen. Julie Denton (R), chair of the Senate Health and Welfare Committee and sponsor of the second law, declined to hear the measure in her committee. The AP/Enquirer reports that pharmaceutical lobbyists "sat in" on almost every meeting state Medicaid officials had with Denton to push for overturning the laws, leaving advocates for repeal feeling "outnumbered and outmaneuvered" by the industry. Denton has said she is "willing to reconsider" the measure if it would restrain costs, but also maintains that drug costs could be controlled with "better management" (AP/Cincinnati Enquirer, 9/5). For further information on state health policy in Kentucky, visit State Health Facts Online.