Florida Could Save $11 Million in Medicaid by Switching to Generic Drugs

Study shows the nation overspent $330 million on brand-name prescription drugs
By: Kevin Derby | Posted: March 29, 2011 3:55 AM

As Medicaid costs continue to grow and the Florida Legislature tries to reform the program to reduce its expenses, a study unveiled Monday proposes expanding coverage for generic drugs.

After a year of research, Alex Brill, an economist and research fellow at the neoconservative American Enterprise Institute (AEI) think tank, penned a study that maintains Medicaid wasted almost $330 million across the nation in 2009, spent on brand-name drugs instead of their generation counterparts.

Brill examined Medicaid costs on 20 drugs, including antipsychotics, anticonvulsants, contraceptive and antibiotic medicines, that came in both brands and generic versions.

“In the majority of instances, Medicaid is reimbursing for generics, but that is not always the case,” said Brill in a media conference call Monday afternoon.

While the Sunshine State trailed behind California -- which led the nation with more than $102 million wasted on the brand-name drugs -- Brill said Florida ranked in the middle when compared to other states.

“In Florida, specifically, it comes to $11 million for these 20 products,” said Brill. “It’s money that can be saved, be reprogrammed elsewhere … or just be saved.”

With more than 2,842,000 Medicaid enrollees in Florida, the Sunshine State constitutes almost 5 percent of the total $329 million wasted in 2009 through brand-name medications as opposed to generic ones. However, Florida did better than most of the nation in terms of the cost of overspending per Medicaid enrollee. While the national average stood at $6.30 overspent on brand drugs per enrollee, Florida was below it at $4.04 per enrollee. Looking at 3.5 million prescriptions across the nation in 2009, Brill found the average amount of waste spent on brand names instead of generics came to $95.44. Florida did considerably better than that national average, at $73.72.

Brill insisted that states can rein-in costs by asserting better control of Medicaid pharmacy programs, and pointed to Massachusetts and Mississippi as two states that have made strides on that front.

With a large number of brand-name drugs losing their patents in the next two years and the number of Medicaid enrollees continuing to grow, Brill warned that the costs associated with brand-name medicines as opposed to generic ones would rise in the immediate future unless states reined-in on costs.

“If the prescribing patterns continue in 2011 and 2012, states stand to overspend by another $300 million to $400 million,” said Brill. “This should not be considered a one-time waste.”


Reach Kevin Derby at or at (850) 727-0859.

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