Fiscal Note

SB0042 - Preferred Prescription Drug List

State Impact:
Enactment of this bill could reduce Medicaid pharmaceutical expenses. The amount of benefit will depend on the type and number of drug categories implemented through a Preferred Drug List (PDL) and the number of times prescribing physicians elect to by pass the Preferred Drug List. A net savings estimate from an initial six categories would reduce Medicaid General Fund expenditures by $2,743,800 and total funding by approximately $9,831,900 the first year. There may be additional savings due to a potential secondary rebate from pharmaceutical companies. Savings to the State could increase in the future as more drug categories are added to the Preferred Drug List. It is anticipated that a full Preferred drug List would be phased in over a period of years. The implementation and ongoing management costs are estimated to total $282,500 General Fund and $415,500 Federal Funds. The savings listed for the two years are net of the implementation costs.

Individual, Business and/or Local Impact:
Enactment of this bill may result in lower co-pays by up to 25 percent less for users of Medicaid pharmaceuticals. Implementation would likely not result in direct, measurable costs and/or benefits for businesses or local governments.