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NACDS, PhRMA help weigh impact of Rx use on Medicaid costs

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ARLINGTON, Va. — The National Association of Chain Drug Stores and the Pharmaceutical Research and Manufacturers of America (PhRMA) co-authored a Health Affairs article on research finding that when prescription drugs are taken as directed by a physician, other medical costs are reduced for certain Medicaid beneficiaries.

medications_handwithpillsTitled “Increased Use Of Prescription Drugs Reduces Medical Costs In Medicaid Populations,” the article is part of the Health Affairs special report “Non-Communicable Diseases: The Growing Burden” and was unveiled at a special briefing on Wednesday in Washington, D.C.

The article was co-authored by Laura Miller, NACDS senior economist; M. Christopher Roebuck, president and chief executive officer of RxEconomics LLC; J. Samantha Dougherty, senior director for policy and research at PhRMA; and Robert Kaestner, professor of economics at the University of Illinois at Chicago.

Using data on more than 1.5 million Medicaid enrollees, the researchers examined the impact of changes in prescription drug usage on medical costs. They found that a 1% increase in overall prescription drug use was associated with decreases in nonprescription drug medical costs for three groups of Medicaid beneficiaries. Among blind or disabled adults, a 1% rise in drug usage was associated with a 0.108 percent decrease in total non-drug costs, for other adults there was a 0.167% decrease, and for children there was a 0.041% decrease.

These patients had one or more of eight chronic conditions that are non-communicable diseases and treated with prescription medications: hypertension, dyslipidemia, diabetes, asthma or chronic obstructive pulmonary disease (COPD), depression, schizophrenia or bipolar disorder, seizure disorder and gastroesophageal reflux disease (GED).

NACDS noted that the findings reinforce a Congressional Budget Office estimate that, for the Medicare population, a 1% rise in prescription drug utilization is associated with a 0.2% decrease in medical spending.

“We are pleased to announce the findings of this research published in Health Affairs today. Proper use of prescription medications is paramount in helping to improve patient health, especially for those with chronic conditions,” NACDS president and CEO Steve Anderson said in a statement.  “This research is further evidence of the impact of taking medications as prescribed, both in helping patients manage their chronic conditions and reducing emergency or catastrophic medical costs associated with medication nonadherence.”


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