5 Key Facts About Medicaid Prescription Drugs Author: Elizabeth Williams Published: Mar 13, 2026

https://www.kff.org/medicaid/5-key-facts-about-medicaid-prescription-drugs/?utm_campaign=KFF-This-Week&utm_medium=email&_hsenc=p2ANqtz--s_u1T4wwt2IzP8dTR4L7QXHqJv01RClTbEwI53QBjijKMOS3or6R2oWaSAxnKBaEZQvy7Cry1T9akmVOM9a47YyCAbA&_hsmi=408653873&utm_content=408653873&utm_source=hs_email Medicaid is the primary program providing comprehensive health and long-term care to low-income people, including access to prescription drugs to treat acute problems and manage ongoing chronic conditions, covering about one in five people in the United States. In recent years, Medicaid spending on prescription drugs has grown substantially, in part due to the emergence of new, high-cost drugs, including GLP-1s and cell and gene therapies that treat, and sometimes cure, rare diseases. At the same time, a more tenuous fiscal climate coupled with federal funding cuts and policy changes in the 2025 reconciliation law have put pressure on state Medicaid programs. As a result, both states and the federal government continue to prioritize the management of rising pharmacy costs. There have been several recent Trump administration prescription drug initiatives, including new payment models, that could help combat rising costs for state Medicaid programs, though questions remain about their impact. While lower prices for state Medicaid programs through the new models could result in reduced Medicaid prescription drug spending and potentially expanded coverage of certain drugs, the extent of the savings and how states or manufacturers will respond remain unclear. To provide context for emerging debates about federal actions to address prescription drug costs, this issue brief highlights five key facts about Medicaid prescription drug coverage, payment, and administration.