Written by 11:22 am Pharmacy Operations

Understanding MEDICAID Drug Formularies

[dropcap]A[/dropcap]ttention pharmacists and pharmacy students!  You can file this post in your “favorites” folder entitled “Things they didn’t teach me in pharmacy school.”  I’m going to talk to you about Medicaid drug formularies.  If you are working in any type of retail, community or outpatient setting – you are probably interacting with a Medicaid formulary in some way on a daily basis.  Most likely you don’t have to give much thought to the formulary itself, as your software simply informs you if the prescribed drug is covered or not.  However, behind the scenes is lurking this often-misunderstood and mysterious document known as a Medicaid drug formulary. 

This post is going to give you a brief and basic working knowledge of Medicaid drug formularies and will hopefully encourage you to visit the Medicaid website for your own state and allow you to better educate patients about their coverage.

A couple terms first need to be defined.  “Medicaid” is the state-administered assistance program (partially funded by your state and partially funded from Federal support).  This is not to be confused (though it often is) with Medicare, which is the Federally administered benefit and includes prescription coverage under Medicare D.  Next, just for the newbies, a “formulary” is a list of covered drugs, along with additional details about their coverage status including tiers, quantity limits and prior authorization requirements.  Virtually all drug benefits are managed by means of a formulary.

Preferred vs. Non-Preferred

A Medicaid drug formulary (also known as a PDL: Preferred Drug List) is a little unique.  Typical (non-Medicaid) formularies usually list drugs as “covered” or “not covered” or “Tier 1” or “Tier 2” etc.  Medicaid is different.  Because Medicaid is required to cover ALL approved medications (with a small list of exceptions for drugs like fertility agents or erectile dysfunction) they usually organize their formularies into “preferred” or “non-preferred” drugs.  The idea is that every category of drugs will have certain choices that are “preferred” and will not require special authorization to use (although they may still need a prior authorization in some circumstances). 

Here is an example of the anticoagulant section of a Medicaid PDL (preferred drug list).  This one happens to come from the Delaware PDL:

Deleware PDL

You will notice in the above example that commonly prescribed “warfarin” is on the “preferred” side and is therefore covered without any special approval necessary.  It is “preferred.”  Medications listed on the right side will require approval of some sort prior to dispensing.  Additionally, you will see that although Pradaxa and Xarelto are preferred, they require a “step-edit” before they can be obtained by the patient.  This means that the patient will first have to try another preferred drug prior to obtaining either of these medications.  This basic structure of “preferred” and “non-preferred” is the foundation around which virtually all Medicaid PDL’s are organized.  Note that Pradaxa and Xarelto are also “preferred” but they require a “step edit” before they are allowed (meaning, most likely, that warfarin needs to be tried or is otherwise contraindicated).

Differences between Medicaid PDL’s

There is a saying I use:  “If you have seen one state Medicaid PDL…you have seen one state Medicaid PDL.”  Brilliant, eh?  But the point is this:  No two state PDL’s are identical.  For example:

  • Some will post their list in a PDF document, others will post it in a Word document. 
  • Some will list BOTH preferred and non-preferred drug.  Others will list only preferred drugs. 
  • Sometimes the document will also contain all the criteria related to drug coverage (prior authorization criteria, quantity limits, etc.) and other times such information will be posted in a separate document. 
  • Some states updated their documents monthly, others quarterly, other annually. 
  • Finally, some states will also provide a convenient “tool” to search for covered medications rather than having a PDF document (or they may have both).

Therefore it is helpful if you as a pharmacist or technician become familiar with the Medicaid PDL in YOUR state and see how they organize and post it.  You may be surprised when you browse the website just how much information is available that you didn’t realize. 

Finding Your State PDL

Where can you find your state’s Medicaid PDL?  Here, depending on your state, is where it can get tricky.  Because each state manages their own PDL (or sub-contracts it out to someone else), there is no consistency about where you will find it listed online.  Start with Google.  Type in your state name followed by “Medicaid preferred drug list.”  What you are looking for is the “landing page” where this document is regularly posted.  You may want to bookmark this page when you find it. 

For example, if you live in Ohio, your state Medicaid PDL is usually found on this page:  CLICK HEREYou will then have to click on the link for the appropriate PDL (see dates).

In Florida your Medicaid PDL is found here: CLICK HERE.  Note:  The Florida PDL lists only preferred drugs.  Non-listed drugs are non-preferred by default.

Finally, the California Medicaid PDL can be found HERE as a tool to search for drugs.  But note that the tool does not show all covered drugs.  To find a more comprehensive list you must go HERE and search the appropriate Contract Drug List Part 1, choosing the correct list and remembering that drugs are listed by generic names only.

Can’t find your state Medicaid PDL?  Shoot me an email.  I’ll help you..

Weirdest Medicaid PDL

The prize for the strangest Medicaid PDL (in my opinion) goes to Missouri.  Rather than listing a single document on which to find all the drugs, they created a separate document for each category.  You can find the list here:  CLICK HERE.

I pity the providers in that state.  LOL. 


There is much more I could say about Medicaid drug formularies.  For example, I haven’t discussed the difference between a standard Medicaid FFS (fee-for-service) model vs. a commercial Medicaid plan.  We haven’t discussed formulary committees or manufacturer rebates.  Such details go beyond what you need to know to start with.  I spent several years researching these things for a previous employer.  Medicaid PDL’s are interesting documents which often contain information that might help you better explain the coverage issues to your patients and providers.

©Jason Poquette and The Honest Apothecary.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts, quotes and links may be used, provided that full and clear credit is given to Jason Poquette and The Honest Apothecary with appropriate and specific links to the original content.

Last modified: July 30, 2016