Executive Summary
State Medicaid programs that elect to provide outpatient prescription drug coverage must cover all FDA-approved drugs that are offered by a manufacturer that agrees to provide rebates. Nevertheless, states have substantial discretion to use utilization control techniques to steer Medicaid beneficiaries toward or away from certain drugs, within limits. This paper describes the rules the protections and limits of state’s discretion to apply utilization controls to prescription drugs in Medicaid.
