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Preferred Drug Lists and Medicaid Prescriptions

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  • Tamer Abdelgawad
  • Lisa Egbuonu-Davis

Abstract

Background: When Medicaid preferred drug lists (PDLs) are implemented, they may impose indirect costs on prescribing physicians and Medicaid patients, leading to an unintended reduction in the number of Medicaid prescriptions filled. Objective: To test retrospectively the proposition that PDLs adversely affect the number of Medicaid prescriptions filled. Data and methods: We compared three ‘test’ states (Alabama, Texas, and Virginia) that implemented PDLs with restrictions on the prescription of statins with three ‘control’ states (New Jersey, North Carolina, and Pennsylvania) that did not implement drug access restrictions. We conducted the analysis at the county level and used a differences-in-differences approach that allows for county and time-period fixed effects. Results: We found that PDLs adversely impacted several measures of filled Medicaid prescriptions in the ‘test’ states relative to the ‘control’ states. Conclusion: There are unintended but potentially harmful consequences to cost-focused health policy interventions. Copyright Adis Data Information BV 2006

Suggested Citation

  • Tamer Abdelgawad & Lisa Egbuonu-Davis, 2006. "Preferred Drug Lists and Medicaid Prescriptions," PharmacoEconomics, Springer, vol. 24(3), pages 55-63, December.
    • Handle: RePEc:spr:pharme:v:24:y:2006:i:3:p:55-63
    DOI: 10.2165/00019053-200624003-00005
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    References listed on IDEAS

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    1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
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    Cited by:

    1. Alvin Headen, 2006. "Medicaid Preferred Drug Lists: Cost Containment and Side Effects," PharmacoEconomics, Springer, vol. 24(3), pages 1-3, December.
    2. Maclean Johanna Catherine & Cook Benjamin & Carson Nicholas & Pesko Michael F, 2019. "Public Health Insurance and Prescription Medications for Mental Illness," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(1), pages 1-25, January.

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