January 10, 2014

State of Alabama
Press Release: Medicaid

Medicaid Pharmacy Commission submits final report to Governor

A report issued by a state panel charged with studying ways to reduce Alabama Medicaid pharmacy costs notes that while the Agency’s pharmacy spending and rate of growth are reasonable and among the lowest in the country, there are changes that could be implemented to improve program effectiveness. 


The Alabama Medicaid Pharmacy Study Commission submitted the report to Governor Robert Bentley December 31. The governor appointed the commission in June 2013 to explore initiatives that could potentially save money for the state, but to report its findings without making any specific recommendations.


During the fall, Commission members studied drug cost information from other states and also considered the impact on local communities of making changes to Medicaid’s pharmacy program. One proposal called for use of a private pharmacy benefit management program while another proposed solution would use the Alabama-based American Pharmacy Cooperative to manage the program. A third proposal would allow Wal-Mart to serve as a preferred provider in exchange for lower costs to Medicaid.


To know the actual savings that could be achieved from any delivery system changes, the Agency would need to go through a Request for Proposal process to know true savings and to understand full program design and capabilities, the report said.


For more than a decade, Alabama’s Pharmacy Program has implemented a variety of measures to control costs without reducing access, including a Preferred Drug List, prior authorization, various billing edits and controls and in 2010, use of Average Acquisition Cost methodology.  

"Alabama's Medicaid program is an efficient and effective program," said Steve Schramm, director of Optumas, an actuary retained by the state.

  • For more information, visit http://medicaid.alabama.gov
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