Pharmaceutical benefit management: an alternative approach.
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Drug Costs↗
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Results for “Formularies as Topic”
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Expensive drugs: let doctors and patients decide.
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Cost Control↗
A cost-effectiveness approach to drug subsidy and pricing in Australia.
The Australian government offers its citizens subsidies on a select list of pharmaceuticals. For a drug to qualify for inclusion on this list, its manufacturer must demonstrate that the drug is both clinically effective and cost-effective. In part, this measure, along with others, was introduced to improve clinical and economic outcomes. Although this evidence-based system has provided transparency and consistency in decision making about which drugs will be covered, it may not have contained the rate of increase in drug costs.
Australia↗
Pharmaceutical cost control in Canada: does it work?
Governments in Canada have instituted mechanisms intended to control drug prices. These include the establishment of a semi-judicial body by the federal government to control factory-gate prices and of various measures at the provincial level, such as formulary management, use of generics, reference-based pricing, price freezes, and limits on markups. To a large extent, these measures have been effective in price control. Total drug spending in the country continues to rise, however; clearly, mechanisms other than price controls will need to be developed if drug spending is to be better managed.
Canada↗
Job-based health benefits in 2002: some important trends.
Based on a national survey of 2,014 randomly selected public and private firms with three or more workers, this paper reports changes in employer-based health insurance from spring 2001 to spring 2002. The cost of health insurance rose 12.7 percent, the highest rate of growth since 1990. Employee contributions for health insurance rose in 2002, from $30 to $38 for single coverage and from $150 to $174 for family coverage. Deductibles and copayments rose also, and employers adopted formularies and three-tier cost-sharing formulas to control prescription drug expenses. PPO and HMO enrollment rose, while the percentage of small employers offering health benefits fell. Because increasing claims expenses rather than the underwriting cycle are the major driver of rising premiums, double-digit growth appears likely to continue.
Cost Sharing↗
The impact of a national prescription drug formulary on prices, market share, and spending: lessons for Medicare?
Several recent bills in Congress to add a Medicare prescription drug benefit would allow the use of formularies to control costs. However, there is little empirical evidence of the impact of formularies among elderly and disabled populations. We assess the effect of a closed formulary implemented by the Veterans Health Administration (VHA) in 1997 on drug prices, market share, and drug spending. We find that the VHA National Formulary was effective at shifting prescribing behavior toward the selected drugs, achieving sizable price reductions from manufacturers, and greatly decreasing drug spending.
Aged↗
Whither seniors' pharmacare: lessons from (and for) Canada.
Canada's provincial governments have, until relatively recently, provided virtually all seniors with generous prescription drug coverage. Managers of these programs have implemented a variety of policies to contain spending while ensuring access to necessary medicines. Some of these policies have been successful in temporarily slowing cost growth. However, the lack of comprehensive utilization management tools has resulted in ongoing spending increases that now constitute a threat to the sustainability of a public drug subsidy for Canadian seniors. Sustainable and equitable pharmacare programs require the political willingness to confront opposition to policies that will, if successful, contain program costs without obstructing access.
Aged↗
Misdirected diagnosis for high drug spending.
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Formularies as Topic↗
Managing psychotropic drug costs: will formularies work?
Payers of pharmaceutical benefits are increasingly turning to drug formularies in an attempt to control rising pharmacy costs, including those for psychotropic drugs. In this paper I examine several issues that policymakers should consider when addressing formulary design for psychotropic drugs: heterogeneity within mental health disorders and limited information about treatment effectiveness for individual patients; the potential for plans to try to use formularies to avoid adverse selection and implications for psychotropic coverage; the interaction of Medicaid formulary policy and manufacturers' incentives for psychotropic innovation; and incentives created by mental health institutions that decrease formularies' potential effectiveness in controlling psychotropic drug costs.
Cost Control↗
Evidence-based and value-based formulary guidelines.
Health plans and hospitals have long used drug formularies, but the processes by which formulary committees made decisions have typically lacked transparency and scientific rigor. A growing number of organizations have begun implementing formulary guidelines issued by the Academy of Managed Care Pharmacy (AMCP). These guidelines call for health plans to request formally that drug companies present a standardized "dossier" that contains detailed information not only on the drug's effectiveness and safety but also on its economic value relative to alternative therapies. This paper describes the guidelines, reviews progress to date, and analyzes several critical issues for the future.
Decision Making, Organizational↗
Physicians' views of formularies: implications for Medicare drug benefit design.
As Congress considers introducing a drug benefit for Medicare, it will more than likely adopt a program that uses a formulary. We examined data from the Community Tracking Study Physicians Survey, a large, nationally representative study of physicians, to learn about physicians' views of formularies. Our results suggest that several aspects of formularies are associated with physicians' positive views about them. Policymakers should consider imposing limits on the number of competing Medicare formularies operating in a particular area, promoting the adoption and use of information technology, and incorporating financial incentives for physicians to adhere to formularies.
Adult↗
How do incentive-based formularies influence drug selection and spending for hypertension?
This study examined the association between incentive-based formularies and antihypertensive drug selection and spending. We compared the use of drugs from five drug classes by the number of tiers and copayment differentials. We found that raising copayments within a single-tier formulary system had a relatively modest impact on use of antihypertensives, compared with raising them in multi-tier systems. Likelihood of using ACE inhibitors and angiotensin II receptor blockers was lower among two-tier plans with generic/brand differentials of dollars 10 relative to flat-copayment plans. Incentive formularies were associated with lower total antihypertensive spending by plans, but enrollees paid more out of pocket.
Deductibles and Coinsurance↗
Comparative effectiveness: asking the right questions, choosing the right method.
The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 has placed renewed focus on assessing the comparative effectiveness of various therapeutic options. Unfortunately, all of the evidence needed to fully assess these options is rarely available to drug formulary decisionmakers. Comparative randomized trials frequently fail to find differences when there indeed are some, while decision-modeling approaches are more likely to identify differences where there are none. We consider the consequences of these strategies. This paper proposes a framework for using different methods to assess available evidence. We contend that choosing the appropriate method can occur only when there are clear policy goals.
Decision Making↗
States' control of prescription drug spending: a heterogeneous approach.
In an effort to balance Medicaid budgets, states use prescription drug cost containment tools in unique ways and in varying combinations. We report on the variability in state-level strategies to control the cost of prescription drugs and describe broad state-to-state differences in per beneficiary spending on drugs. This heterogeneity raises the question of appropriate state program variability. Research is needed to determine the medically, ethically, and legally most suitable means of controlling drug costs, especially as the Medicare Part D drug plan will likely recapitulate the prescription drug program variability observed among the states.
Aged↗
Centralized drug review processes in Australia, Canada, New Zealand, and the United kingdom.
Many countries have centralized the clinical and economic assessments necessary for evidence-based drug coverage policy. We analyze such processes in Australia, Canada, New Zealand, and the United Kingdom. These countries apply comparable approaches to the assessment and appraisal of evidence but apply the processes to different types of drugs and use the reviews within different decision-making contexts. Review processes applied to all medicines and clearly tied to coverage decisions appear to influence national drug use. Rigor of process and transparency of data and rationale are believed to be important for maximizing the impact and political acceptability of the processes.
Australia↗
Implications of Part D for mentally ill dual eligibles: a challenge for Medicare.
Through the Part D drug program, Medicare has assumed responsibility for the prescription drug needs of beneficiaries and, consequently, for an important component of mental health treatment: psychotropic drugs. Managing the prescription drug benefits of mentally ill dual eligibles could challenge this new program. Efforts to balance quality assurance and cost-effectiveness will be complicated by this population's vulnerability and high level of health care need, the uncertainties surrounding optimal psychotropic drug use, and the economic incentives of prescription-only insurers. We discuss the details and policy implications of this challenge.
Cost Sharing↗