Abby Alpert, Health Care Management, The Wharton School
Abstract: Prescription drug spending has increased rapidly over the last two decades. Prior authorization represents an innovative strategy in Medicaid’s prescription drug benefit management, using administrative tools to influence prescribing behaviors and control expenses. State Medicaid programs have widely adopted prior authorization policies to curb spending and enhance the targeting of treatments. Despite the importance of these policies for Medicaid, there is limited evidence of their impact on prescription drug access and patient outcomes. In this project, we use a novel regression-discontinuity design to study the consequences of prior authorization. We study the impact of these policies on the prescribing of drugs covered by prior authorization and substitution to other drugs as well as heterogeneous impacts across geographic areas and socio-demographic characteristics. We also assess the importance of different design features of these policies and their impact on inappropriate and appropriate prescribing.