Executive Summary
Under federal law, state Medicaid programs are required to cover (with a few exceptions) outpatient prescription drugs for “medically accepted indications.” Medically accepted indications are both those that are included on the drug’s label by the FDA as part of the approval process, and certain “off-label” uses.Medicaid programs are required to apply a uniform statutory standard when deciding which outpatient drugs they must cover. The uniformity is an important beneficiary protection because it prevents various and conflicting standards from one state to the next. However, because of the limits of the existing system of coverage for off-label uses, Medicaid outpatient drug benefit coverage of off-label uses is not always as uniform as intended.
