The effect of Medicaid formularies on the availability of new drugs.

This study expands our previous work on the availability of new drug introductions to poor patients in states in the USA with restrictive Medicaid formularies. In particular, it focuses on the experience of 9 states over the period 1979 to 1985. In these states, a typical new drug took 20 months after FDA approval to gain acceptance onto the Medicaid formulary. New drug introductions were available to Medicaid patients less than 40% of the time during their first 4 years of market life. Restrictions on availability also extended to drugs ranked high in terms of both therapeutic and commercial importance. There was substantial variation observed across states and therapeutic categories. While formularies are prohibited under legislation recently enacted by the US Congress, state governments may attempt to continue to restrict access to expensive new medicines through prior approval systems. This is an issue that warrants future attention and study.

Duke Scholars

Author Henry G. Grabowski Economics