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PubMed2003

The effect of incentive-based formularies on prescription-drug utilization and spending.

BACKGROUND: Many employers and health plans have adopted incentive-based formularies in an attempt to control prescription-drug costs. METHODS: We used claims data to compare the utilization of and spending on drugs in two employer-sponsored health plans that implemented changes in formulary administration with those in comparison groups of enrollees covered by the same insurers. One plan simultaneously switched from a one-tier to a three-tier formulary and increased all enrollee copayments for medications. The second switched from a two-tier to a three-tier formulary, changing only the copayments for tier-3 drugs. We examined the utilization of angiotensin-converting-enzyme (ACE) inhibitors, proton-pump inhibitors, and 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitors (statins). RESULTS: Enrollees covered by the employer that implemented more dramatic changes experienced slower growth than the comparison group in the probability of the use of a drug and a major shift in spending from the plan to the enrollee. Among the enrollees who were initially taking tier-3 statins, more enrollees in the intervention group than in the comparison group switched to tier-1 or tier-2 medications (49 percent vs. 17 percent, P<0.001) or stopped taking statins entirely (21 percent vs. 11 percent, P=0.04). Patterns were similar for ACE inhibitors and proton-pump inhibitors. The enrollees covered by the employer that implemented more moderate changes were more likely than the comparison enrollees to switch to tier-1 or tier-2 medications but not to stop taking a given class of medications altogether. CONCLUSIONS: Different changes in formulary administration may have dramatically different effects on utilization and spending and may in some instances lead enrollees to discontinue therapy. The associated changes in copayments can substantially alter out-of-pocket spending by enrollees, the continuation of the use of medications, and possibly the quality of care.

Angiotensin-Converting Enzyme Inhibitors↗
PubMed2004

Medicaid prior-authorization programs and the use of cyclooxygenase-2 inhibitors.

BACKGROUND: Over the past five years, selective cyclooxygenase-2 inhibitors (coxibs) have accounted for a growing proportion of prescriptions for nonsteroidal antiinflammatory drugs (NSAIDs). To control these expenses, many state Medicaid programs have implemented prior-authorization requirements before coxibs can be prescribed. We evaluated the effect of such programs on the use of coxibs by Medicaid beneficiaries. METHODS: We surveyed state Medicaid agencies to determine whether prescription of coxibs required prior authorization and, if so, the criteria for authorization. For each program, we compared these criteria with evidence-based recommendations for prescribing of coxibs. Using data for all filled prescriptions in 50 state Medicaid programs from 1999 through the end of 2003, we calculated the proportion of defined daily doses of NSAIDs accounted for by coxibs. Time-series analyses were used to measure the changes in prescription patterns after the implementation of each prior-authorization program. RESULTS: By 2001, coxibs accounted for half of all NSAID doses covered by Medicaid. This proportion varied widely according to the state in 2003, from a low of 11 percent to a high of 70 percent of all NSAID doses. Twenty-two states implemented prior-authorization programs for coxibs during the study period. Overall, the implementation of such programs reduced the proportion of NSAID doses made up by coxibs by 15.0 percent (95 percent confidence interval, 10.9 to 19.2 percent), corresponding to a decrease of 10.28 dollars (95 percent confidence interval, 7.56 dollars to 13.00 dollars) in spending per NSAID prescription. The effect of such programs was not influenced by the degree to which a prior-authorization program incorporated evidence-based prescribing recommendations. CONCLUSIONS: The use of coxibs and spending on NSAIDs varies widely by state and declined substantially after the implementation of prior-authorization programs. Determining whether these reductions are clinically appropriate will have important implications for the development of rational drug-reimbursement policies.

Anti-Inflammatory Agents, Non-Steroidal↗
PubMed2004

"Tough but fair"? The active management of the New Zealand drug benefits scheme by an independent Crown agency.

For just over a decade, New Zealand has relied on an independent Crown agency to manage the public drug benefits scheme. It was established after a period of industry litigation and unsustainable budgetary increases. The agency has successfully contained prices, saving the equivalent to its originally allocated budget every year, despite a 50% increase in volumes. It shares features with similar agencies elsewhere in the world, particularly in its independence and its operational methodology. Opposition from the industry and ambivalence in the medical community remain matters of concern. The fate of such agencies is inextricably linked to wider regulatory and policy settings in the health sector.

Budgets↗
PubMed2004

Generic drugs: international trends and policy developments in Australia.

Public and private third-party payers in many countries encourage or mandate the use of generic drugs. This article examines the development of generics policy in Australia, against the background of a description of international trends in this area, and related experiences of reference pricing programs. The Australian generics market remains underdeveloped due to a historical legacy of small Pharmaceutical Benefits Scheme price differentials between originator brands and generics. It is argued that policy measures open to the Australian government can be conceived as clustering around two different approaches: incremental changes within the existing regulatory framework, or a shift towards a high volume/low price role of generics which would speed up the delivery of substantial cost savings, and could provide enhanced scope for the financing of new, patented drugs.

Australia↗
PubMed1998

The Pharmaceutical Benefits Scheme and the shifting paradigm of welfare policy.

This paper describes the design and operation of the Pharmaceutical Benefits Scheme and then proceeds with an analysis of current policy deliberations which identifies an extension of the market as predominant trend. The paper demonstrates that the conditions which historically sustained the scheme are now present to a lesser extent. The Pharmaceutical Benefits Scheme has functioned as a universalist welfare program which conferred onto the Commonwealth Department of Health substantial powers vis-à-vis drug suppliers and professional groups. This position of dominance has been eroded, with challenges to established arrangements arising, in particular, from the enhanced bargaining position of business and wider pressures operating on the Keynesian welfare state.

Australia↗
PubMed1989

Drug substitution and rational therapeutics. Old problems and new challenges.

Drug substitution is a reality of current medical practice. Physicians need to be aware of how it affects patients both medically and economically. Continuing education in clinical pharmacology is essential. Although generic substitution and formulary restriction are usually acceptable, therapeutic substitution is not. The responsibility of instituting therapy by writing a prescription must not be delegated to non-physicians. This could ultimately lead to more problems with adverse drug reactions and poor clinical outcome.

Drug Prescriptions↗
PubMedDate not supplied

Evolution of statewide EMS drug formularies and regulations.

OBJECTIVE: To characterize and follow the variability present in statewide emergency medical services (EMS) medication formularies across the United States over a ten-year period. METHODS: Investigators contacted the lead EMS agencies in all 50 states during three years (1992, 1997, and 2002). Using a standardized form, the investigators collected information about each state's prehospital medication policies, including whether a statewide EMS medication formulary existed, the authority of local medical directors to modify it, and what medications it contained. The investigators then sorted states into categories based on the regulatory intent of their EMS medication policies and compared medication listings across years. RESULTS: Responses were obtained from all 50 states (n = 50, 100%) during each of the survey periods. There appeared to be a trend toward stricter state control and toward less variation between statewide formularies. State regulations in seven states stopped allowing local medical directors to retain full control of their systems' formularies, and eight states implemented mandatory statewide formularies. There was a trend toward more consistency between states, with more "most commonly" listed medications (6.9% in 1992 versus 22.1% in 2002) and fewer "least commonly" listed medications (58.3% in 1992 versus 42.3% in 2002). Controversial medications such as neuromuscular blockers and thrombolytics appeared in a small but increasing number of statewide formularies. CONCLUSIONS: Considerable variation was found among statewide EMS medication formularies, both in how they were established and in their contents. Although several states continued to rely solely on local medical direction, there seemed to be a trend toward more uniformity and stricter state control over prehospital medication formularies during the study period.

Emergency Medical Services↗
PubMed1995

Effect of prescribing guidelines on the use of neuromuscular blocking agents.

The effect of prescribing guidelines on the use of neuromuscular blocking agents (NMBs) was studied. Voluntary guidelines on the appropriate prescribing of formulary NMBs in the operating rooms at a university hospital were approved in January 1993. Patients who underwent inpatient surgery with neuromuscular blockade during a preguideline period (March 1, 1992, through May 31, 1992) or a postguideline period (March 1, 1993, through May 31, 1993) were randomly selected (n = 200 per group) and compared to determine the relative appropriateness, effectiveness, safety, and cost of NMB use. The preguideline and post-guideline groups were demographically similar. There were significantly more instances of appropriate NMB use after than before the guidelines were established. Neuromuscular blockade was maintained inall patients. The overall rates of NMB-associated adverse events were 5.5% and 7.5% for the preguideline and postguideline groups, respectively. The acquisition cost of NMBs and drugs used to treat NMB-associated adverse events for the preguideline patients was $4261, versus $2978 for the postguideline patients. Extrapolated to the estimated 10,000 operations per year requiring neuromuscular blockade at the institution, the total cost was $213,000 before guideline introduction and $149,000 afterward, for a guideline-associated cost reduction of $64,000. Prescribing guidelines reduced expenditures for NMBs without affecting clinical outcomes.

Drug Costs↗
PubMed1995

Pharmacy benefit management companies.

The principal services offered by pharmacy benefit management companies (PBMs) are described. A PBM contracts with employers, insurers, and others to provide accessible and cost-effective benefits to those groups' members. PBMs vary in their organization and services because they originate from different types of businesses. Many PBMs have been formed by publicly traded companies that have combined traditional ways of controlling cost and use, such as formularies, with new elements to form organizations whose primary function is managing the pharmacy benefit. Often, the PBM is paid a fixed amount for which it must provide all contracted services. PBMs may provide pharmacy services themselves (e.g., mail order prescription service is offered by Medco, one of the largest PBMs); more often, they subcontract with others to provide certain services. Full-service PBMs have the following functions: establishing networks of pharmacies for use by plan members; processing claims electronically at the time a prescription is filled and thus maintaining a database on drug use and cost; using these data to generate various reports; encouraging the use of generic products; managing existing formularies, helping to establish customized formularies, or providing a national formulary; providing information to support formulary guidelines (counter-detailing); offering programs in which prescriptions for maintenance medications are filled less frequently with larger amounts, often by mail order; negotiating volume-based rebates from manufacturers; performing drug-use review; developing disease management programs based on clinical practice guidelines and measurements of patient outcome; and evaluating outcomes by combining data on drug therapy with information about other parts of the patient's care.(ABSTRACT TRUNCATED AT 250 WORDS)

Contract Services↗