Medicaid Report: New Hampshire and Vermont

Prescription Drug Cost Containment
PRS Briefs
PRS Policy Brief 0506-09
Tuesday, October 24, 2006

New Hampshire and Vermont, along with many other states, are currently struggling to contain the continually rising cost of Medicaid. In recent years, prescription drugs have been one of the largest and the fastest growing component of these costs in both states and across the nation. This report examines the impact of prescription drug costs on New Hampshire and Vermont Medicaid budgets. It presents the use of preferred drug lists (PDLs) and generic drugs, "fail first" requirements, and the extraction of supplemental rebates from drug manufacturers as possible options for reducing the strain placed on the states' limited budgets. It explains the existing use of these methods in each state (where present), identifies potential avenues for further savings and provides important caveats to bear in mind when using these methods.