A critical analysis of studies of state drug reimbursement policies: research in need of discipline

Milbank Q. 1993;71(2):217-52.


Concerns over pharmaceutical costs and appropriateness of medication use have led state Medicaid programs to restrict drug reimbursement. This article critically reviews 20 years of research on cost sharing, drug reimbursement limits, and administrative limitations on access to particular drugs via formularies, category exclusions, or prior authorization requirements; evaluates their methodological rigor; summarizes the state of current knowledge; and proposes future research directions. Drug reimbursement caps and modest cost sharing can reduce the use of both essential and less important drugs in Medicaid populations; severe reimbursement caps may precipitate serious unintended effects. Limitations on access to particular drugs can cause both rational and irrational drug substitution effects; it is unclear whether such limits reduce expenditures either for drugs or for overall health care.

Publication types

  • Research Support, U.S. Gov't, Non-P.H.S.

MeSH terms

  • Cost Control
  • Cost Sharing
  • Drug Costs
  • Drug Prescriptions / economics
  • Drug Utilization / economics
  • Forecasting
  • Formularies as Topic
  • Health Policy / economics
  • Health Services Research
  • Insurance, Pharmaceutical Services / legislation & jurisprudence
  • Insurance, Pharmaceutical Services / statistics & numerical data*
  • Medicaid / legislation & jurisprudence
  • Medicaid / statistics & numerical data*
  • Research Design
  • State Health Plans / economics*
  • State Health Plans / statistics & numerical data
  • United States