by Devon M. Herrick
National Center for Policy Analysis
November 14, 2013
Michigan is moving to cover Medicaid enrollees in privately-administered managed care plans. The state should also continue to move enrollees to managed drug plans. Virtually all state Medicaid programs distribute some drugs on a fee-for-service (FFS) basis separately from any health plan. State Medicaid programs that carve out drug benefits often ignore drug therapy coordination and management. Private health plans that provide medical care to Medicaid enrollees are the logical entities to manage drug benefits. This analysis makes clear that Michigan should avoid the mistake of allowing any willing pharmacy to participate in the Medicaid drug program rather than authorizing drug plan managers to negotiate lower prices with exclusive pharmacy networks. Any willing pharmacy laws that allow outsiders to participate in a drug plan’s network reduce the power of managers to negotiate lower prices and unnecessarily facilitates waste, fraud and abuse.