November 14, 2019

Pennsylvania has proposed legislation (PA HB 941) to reconfigure the payment rates used for Medicaid prescriptions paid by Medicaid MCOs to pharmacies. This study conveys findings from our efforts to reprice Pennsylvania’s 2018 Medicaid MCO prescription drug claims to estimate the financial impact of implementing this policy.

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Key overall finding is that the NADAC + $10 dispensing fee pricing methodology would result in increased expenditures in Pennsylvania.

  • Our tabulations indicate that NADAC pricing would lead to a 2.6% to 8.3% increase in Medicaid MCO pharmacy expenditures, using an estimated range based on assumptions about how NADAC pricing would be used for generic drugs.
  • The annualized additional cost associated with mandated reimbursement of NADAC + $10 range from $43.8 million to $137.4 million per year.