New CMS Medicaid drug pricing data released with stunning findings

Recently, CMS updated their State Utilization databases, which provides quarterly drug pricing data that shows what state Medicaid programs are spending on prescription drugs. While Medicaid is only one (large) component of prescription drug spending, its importance is less based upon its size than it is the amazing amount of transparency in the program, relative to other segments of the market.

Thanks to CMS' quarterly State Utilization Data updates, as well is its regular updates of National Average Drug Acquisition Cost (NADAC), we have a plethora of information to begin dissecting what is driving prescription drug spending, and use those findings as cheat sheets for digging into Medicare, commercial, and other programs.

This most recent CMS data update ended up filling in most of the Q2 2018 potholes and extended the 2018 data to include large portions of the third quarter. We have updated all of our dashboards that rely on this dataset, rolling all of them forward to Q3 2018, and there are some stunning takeaways.

This update is a really big deal for us at 46brooklyn, because it is the first time that a dataset’s timing will overlap with our existence as an organization. With our launch in August 2018, this meant that CMS’ latest utilization data update for Q3 2018 would be the first real quarter of data that could have been theoretically impacted by our work and Ohio’s work to bring transparency to drug pricing in state Medicaid programs and beyond. After analyzing the data, the results are nothing short of amazing, and a clear indication that this system is in the midst of change. Here's a summary of the takeaways:

  • The drug with the highest markups overall has historically been generic Gleevec (Imatinib Mesylate), and unfortunately for many states, those markups grew even larger.

  • Everything is bigger in Texas, including their overall growth of generic drug markups.

  • North Dakota and Indiana continue to enjoy the highest markups per pill in the country.

  • Something is happening in Ohio.

  • Markups across the country are growing.

Additionally, be sure to check out unearthed audio that we obtained from the state of North Dakota, where there are some alarming trends being identified by their state Medicaid program.

We have also released a deep dive into our home state of Ohio, where markups absolutely crashed in Q3 2018. Ohio was featured prominently in April by United States Senator Chuck Grassley and Ron Wyden, in their joint letter to the Inspector General of the U.S. Department of Health and Human Services calling for an investigation into pharmacy benefit manager (PBM) "spread pricing" and any other unseemly practices. This marketplace is changing, and Ohio is at the heart of it all. Here’s a rundown of what's been happening in Ohio, and what changed once transparency hit the Medicaid managed care program.