Inappropriate use of prescription drugs can cause adverse reactions. States have established programs to review Medicaid prescriptions before drugs are dispensed to prevent these reactions. Most states have implemented automated prospective drug utilization (PRODUR) systems. This report examines states' experiences in using automated PRODUR systems & focuses on how such systems can improve patient safety by identifying & preventing inappropriate drug therapy, reduce program costs, & reduce the incidence of fraud, waste, & abuse.

Medicaid spent $15 billion on outpatient prescription drugs (PD) in FY 2007. Instead of directly purchasing PD, state Medicaid programs reimburse pharmacies for dispensing them to Medicaid beneficiaries. For certain PD, state Medicaid programs may only receive fed. matching funds for reimburse. up to a max. amount known as a fed. upper limit (FUL). The Deficit Reduction Act of 2005 changed the methodology for calculating FULs. This report found that if AMP-based FULs had been in place in the 2nd qtr. of 2008, they would have been lower than avg. retail pharmacy costs for most of the drugs in the sample and in the nat. aggregate. However, 64 drugs had at least one therapeutically equivalent version with acquisition costs below the FUL. Illus.

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