OBJECTIVES: Under the Medicaid Drug Rebate Program, certain highly rebated brand-name drugs are less expensive than corresponding generics. All states receive rebates, but only some states publish lists of brand-over-generic preferred lists, and it is not clear to what extent states are steering patients to use these highly-rebated brand-name drugs. The goal of this project was to understand trends in Medicaid use of 10 highly rebated brand-name drugs with generic competition.

METHODS: We identified 9 drugs with brand-over-generic designations in at least 8 of 15 states with public brand-over-generic lists as of December 2022. We calculated the proportion of brand-name use based on the national number of units reimbursed for each drug in 2022 from Medicaid State Drug Utilization Data. We stratified results based on whether drugs were reimbursed via fee-for-service plans or managed care organizations (MCOs), which do not directly benefit from Medicaid rebates.

RESULTS: For these 9 drugs, brand-name versions account for a median of 57.5% of Medicaid use, ranging from 47.0% for methylphenidate (Concerta) to 81.5% for glatiramer acetate (Copaxone). Brand-name use was higher in fee-for-service (median 66.7%) rather than MCOs (median 52.6%); 2 drugs had higher brand-name use in MCOs than in fee-for-service Medicaid. For 7 drugs, we found that the brand-name use was higher when drugs were reimbursed by fee-for-service rather than MCO.

CONCLUSIONS: For highly-rebated brand-name drugs, generics continued to account for a sizeable minority of use. This suggests that states could generate savings by better steering patients to use these branded drugs to take advantage of statutory rebates. Brand-name drug use was lower when drugs were reimbursed by MCOs, which do not directly benefit from Medicaid rebates. States need to align financial incentives with MCOs better to maximize rebates.