State-sponsored pharmacy assistance programs (SPAPs) provide prescription drug coverage for low-income, older, and disabled persons who are not eligible for Medicaid and who may have no other drug coverage. But, like Medicaid and private insurance programs, SPAPs have confronted steadily increasing prescription drug costs, caused by such overall health care trends as increased prescription drug use, drug price increases, and shifts to newly introduced, more costly drugs. Increases in SPAP enrollment, reflecting such factors as reduced availability of pharmacy coverage through Medicare+Choice plans and expansions of eligibility benefits in SPAPs, also have contributed to SPAP expenditure increases. Faced with increasing costs and mounting budget pressures, SPAPs have experimented with a variety of cost-control measures, although by affecting manufacturers, pharmacies, or consumers these measures have been politically contentious. This report, the third in a series on SPAPs, reviews expenditure patterns and discusses strategies used to manage costs.
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