Fact Check Friday: Medicaid spending on prescription medicines

Allyson Funk
Allyson Funk October 16, 2015

Fact Check Friday: Medicaid spending on prescription medicines.

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This week on Fact Check Friday, we’re talking about Medicaid. Medicaid provides health coverage for low-income and disabled individuals and is jointly funded by states and the federal government. 

New medicines are bankrupting Medicaid. 

Prescription medicines are a small share of Medicaid spending. 


It’s easy to stir up a crisis with rhetoric and selective facts. Recent rhetoric on spending in state Medicaid programs has done just that. Even as life-changing, new, innovative medicines come to market to help patients live longer, healthier lives, Medicaid spent less than 2 percent of its budget on fee-for-service prescription drugs in 2014 according to a recent GAO report 

Medicaid directors have made numerous claims about how new treatments, especially for hepatitis C, are breaking their budgets. But what are the facts? In 2014, Medicaid covered an estimated 17,346 prescriptions for a 12 week course of treatment for the two most commonly prescribed new hepatitis C medications; that’s less than 5 percent of Medicaid prescription drug spending and less than a quarter of a percent of annual Medicaid costs.

Overstating the cost impact of prescription medicines and ignoring the competitive biopharmaceutical market that exists in the U.S. neglects the important reality of the significant savings adherence to medicines can generate for Medicaid programs.

Read more on the reality of prescription drug spending in Medicaid here and sign-up for updates to get the latest Fact Check Friday myths and facts.

Topics: Part D, Medicaid