Report: State Medicaid programs can reap savings with increase in generic drug use

WASHINGTON — Ten states could reap significant savings by increasing the use of generic drugs in their state Medicaid programs, the Generic Pharmaceutical Association said Monday in response to a report by the American Enterprise Institute, a conservative think tank.

The report, “Overspending on Multi-Source Drugs in Medicaid,” by Alex Brill, identified states that overspend the most on their Medicaid programs, with California, Texas and Georgia topping the list.

The study found that some state Medicaid programs spend large amounts of money reimbursing pharmacies for branded drugs when cheaper generics are available. California, for example, overspent by $102 million in 2009, while Texas overspent by $31 million and Georgia by $25 million. Other states cited were Ohio, New York, Pennsylvania, Iowa, Illinois, Florida and North Carolina.

Another study, conducted earlier this year, found that the states and the federal government could save $682 million each year by increasing the Medicaid generic drug dispensing rate by 1%.

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