Using clinical evidence to manage pharmacy benefits: experiences of six states

Medicaid agencies report that pharmacy costs are a major driver of overall program spending growth. Many states believe that clinical evidence can be used to curtail pharmacy costs while ensuring beneficiary access to needed prescription drugs. In 2004, researchers from the National Academy for State Health Policy and Georgetown University conducted site visits to examine how state Medicaid agencies in California, Florida, Kansas, Michigan, Missouri, and Washington manage their pharmacy benefits. This brief focuses on states' use of clinical evidence and preferred drug lists. It summarizes the states' experiences in four areas of pharmacy benefit management: the role of pharmaceutical and therapeutics committees in developing preferred drug lists; use of prior approval processes to enforce preferred drug lists; the role played by the Drug Effectiveness Review Project in helping states manage drug utilization; and the management of behavioral health pharmaceuticals.