Medicaid spends a lot on outpatient drugs, but which cost the most?

With more than 70 million beneficiaries, Medicaid spent more than $27 billion on outpatient drugs two years ago. But which medicines have cost the program the most money?

Not surprisingly, many of the drugs topping the list carried high price tags. Between January 2014 and June 2015, the costliest medications were the Abilify antipsychotic pill; the Sovaldi and Harvoni hepatitis C treatments; the Vyvanse attention deficit medicine; and the Truvada HIV drug, according to a new analysis by the Kaiser Commission on Medicaid and the Uninsured.

However, the analysis, which examined list prices before manufacturer rebates, noted that 45 of the 50 costliest drugs were considered high-cost items partly because they were frequently prescribed. And 28 of those medicines were, in fact, frequently prescribed, although they were not as expensive on a per-prescription basis. These included the Vyvanse treatment for attention deficit disorder.

Another example was hydrocodone-acetaminophen, which is the generic form of Vicodin and the most frequently prescribed drug. In fact, opioids were the second most prescribed group during the study period. Vicodin and Suboxone, which is the brand-name for the combination of buprenorphine and naloxone, were among the costliest since they were frequently prescribed.

However, 17 of the drugs were both frequently prescribed and also expensive on a per-prescription basis. Seven of these were anti-retrovirals that are used to treat HIV, including Truvada, Atripla, and Stribild. The Abilify antipsychotic pill also fell into this category, partly because of off-label use, although it’s unlikely to appear on such a list again because generic versions have since become available.

“The whole story is not just about the most expensive or very expensive drugs,” said Katherine Young, a senior research analyst at the Kaiser Family Foundation. “What’s just as important to remember is the level at which they’re prescribed.”

Of course, the report noted that aggregate drug costs reflect both volume and the cost for each prescription. But while numerous drugs are commonly used, such as the amoxicillin antibiotic, these are not necessarily among the costliest to Medicaid, simply because many are inexpensive on a per-prescription basis.

At the same time, the Kaiser analysis found that many drugs that are expensive per prescription are not widely used by Medicaid enrollees. These include drugs to treat hemophilia, such as Novo Nordisk’s NovoSeven RT, which topped the list at nearly $59,000 before rebates. This was closely followed by Kedrion Biopharma’s Koate-DVI at more than $57,000.

Meanwhile, list prices for the Sovaldi and Harvoni hepatitis C treatments sold by Gilead Sciences — $84,000 and $94,500, respectively — have caused a furor. But on a monthly per-prescription basis, they were not the most expensive outpatient drugs to Medicaid, according to Young.

Like many analyses of drug pricing, this latest report relied on list prices, which are not the actual costs, noted Jeff Myers, who heads Medicaid Health Plans of America, a trade group for Medicaid managed care organizations. Nonetheless, he argued that the Kaiser analysis further confirms the trend that rising prices remain an issue.

“We can argue about the percentage [by which prices are rising], but I don’t think any reasonable person would disagree with the analysis,” he told us.