Medicaid prescription drug spending in the 1990s: a decade of change

Medicaid spending increased dramatically during the 1990s, driven in part by spending for prescription drugs. From 1990 to 2000, Medicaid drug spending increased from $4.4 billion to over $20 billion, an average annual increase of 16.3 percent. Disabled persons experienced an even greater 20 percent average annual increase. By drug category in 1997 (for 29 States), the highest spending amount was for central nervous system (CNS) drugs, accounting for 17 percent of total Medicaid drug spending. These findings provide information on drug spending for dually eligible beneficiaries to policymakers as they seek to target cost-effective coverage and drug therapies.