The rebate requirements in Medicaid have been very successful at lowering drug spending and generated rebates over 3 times greater on average than those produced by private sector pharmacy benefit managers (PBMs) in Medicare Part D. However, states do not have as many tools as the private sector to manage the Medicaid drug benefit, which gives them limited ability to rein in costs for new high-cost specialty drugs, which comprise a growing share of the drug pipeline.
