Medicaid drug costs are cut in Illinois by lowering payouts to pharmacists

State officials are carving millions of dollars out of Illinois’ Medicaid drug costs. The savings stem from reducing the amount the state pays pharmacists for buying and dispensing drugs and by cutting what it pays for certain kinds of prescription drugs.

Officials of the Bureau of the Budget in Springfield also have introduced new rules requiring doctors and pharmacists to use the cheapest prescription drugs available, when possible, to treat Medicaid patients, according to George Hovanec, deputy budget director.

Double-digit growth in Medicaid drug bills during the past three fiscal years prompted the proposal, he said.

"At the end of fiscal year 2000 [June 30], Medicaid costs, including drug, doctor, and hospital costs, had escalated by $60 million over projections," Mr. Hovanec said.

State planners project 20% per year growth in Medicaid costs, driven by increases in the cost of prescriptions.