Tennessee’s new Medicaid model allows state to deny coverage of some drugs

Tennessee’s newly approved Medicaid block grant model includes a closed formulary that allows the state to decline coverage of certain prescription drugs if regulators say they are too expensive, The New York Times reported.

Medicaid is required to cover a wide variety of prescription drugs, but is guaranteed by law to pay the lowest price for those drugs of any drug purchaser in the U.S., according to the Times. Under Tennessee’s new Medicaid model, the first of its kind, the state will be allowed to negotiate prices with drugmakers and can decline coverage if it decides the price is still too high. Massachusetts has previously asked for permission for similar authority, but was denied, the Times reported.

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