Comments on a Study on the Effects of a Restrictive Drug Formulary

GAO reviewed a study which discussed the fact that the high cost of the Medicaid program has forced many States to contain costs via restrictions on optional services such as prescribed drugs. The author concluded that the savings accrued from outpatients' and long-term care patients' drug purchases, which formerly would have been reimbursed through Medicaid, was more than offset by the increase in the demand for nonprescription services. No causal relationship between the decrease in drug prescription costs and the increase in non-prescription services was demonstrated in the study. The author concluded that restricting some medications caused many elderly and disabled persons to become more ill and use more non-prescription services.