Controlling the cost of branded drugs.
Formularies are no longer used merely to cut costs. The new emphasis is on providing appropriate pharmaceuticals at the most cost-effective price.
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Formularies are no longer used merely to cut costs. The new emphasis is on providing appropriate pharmaceuticals at the most cost-effective price.
Managed care pharmacy organizations have the responsibility to promote high-quality cost-effective health care that provides value to their enrolled populations. Application of management interventions that reduce the inappropriate use of medications and enhance the appropriate use of medications that improve patient outcomes and the cost effectiveness of care can help meet these responsibilities. To accomplish these management objectives, managed care pharmacy organizations should aggressively apply the results of pharmacoeconomic studies and, where possible, participate in the conduct of these studies.
Decision analysis, a structured approach to decision making, is presented and applied to a typical management situation. Decision analysis is an explicit, quantitative, and prescriptive approach to choosing among alternative outcomes. It engenders in the decision maker an analytical viewpoint, the need to structure the various courses of action and the resultant consequences of the actions, to assess the degree of uncertainty of the actions occurring, and to value the preferences for the alternative outcomes. Literature examples of using pharmacy-related decision analysis are provided, including its use in formulary additions, cost-effectiveness analysis, drug therapy evaluation, therapeutic drug monitoring, and health policy issues.
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Ten years ago, United HealthCare created its drug formulary for IPA-model HMOs. Formularies have been in place in large staff- and group-model plans since the 1970s. Dr. Navarro reflects on how far formularies have come and predicts where they will lead in the future.
Pharmacy costs in most private insurance companies and public concerns have risen over the past several years. To address the problem of increased expenditures in its government employee pharmacy program, the State of New York sought bids from outside vendors to help it control pharmaceutical costs. The following is a case study of the tools the state employed in that effort. Over time, both prescription drug coverage and mental health and substance abuse benefits were carved out of the medical plan and are now provided under free-standing programs. In order to participate, an independent pharmacy must accept a discount of 10% off the average wholesale price of brand name drugs and 25% off the average generic price of generic drugs.
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The objective of this study is to utilize a clinical trial based on a decision-analysis model to assess the economic benefit of a lower incidence of gastrointestinal lesions in elderly patients with osteoarthritis receiving nabumetone therapy compared with ibuprofen alone and in combination with misoprostol. An arthritic population of an HMO (> 60 yr of age) was applied to the decision analysis based on the HMO's nonsteroidal anti-inflammatory drug and antiulcer usage and acquisition costs. Results indicate the potential for a decrease in overall medical resource utilization through the use of nabumetone in elderly patients with rheumatoid and osteoarthritis. Based on this information, nabumetone has been added to the HMO formulary as a second-tier agent with a repeat of the analysis scheduled in one year to verify the economic benefits and modify prescribing guidelines accordingly.
What strategies are effective for educating your medical staff about medications and medication-related issues? Kaiser Permanente of Ohio has developed an educational program for its medical staff that involves four key components: a custom-designed formulary handbook, drug fairs, traditional letter/newsletter communication pieces and educational meetings, and collaborative projects between its pharmacy and medical staffs. These educational techniques--many of which have been successfully adapted from the pharmaceutical industry--can be adopted for use at your institution.
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Pharmaceutical expenditures have been increasing over the last few decades, both in the private sector and the Department of Defense (DoD). The Pharmacoeconomic Center (PEC), staffed with personnel from the Army, Navy, and Air Force, was established in 1993 to develop the means to control these pharmaceutical expenditures and to develop the DoD TriService Formulary (TSF). The TSF serves as the basis for a consistent and equitable pharmacy benefit for DoD patients. The initial TSF contains medications that are well accepted as standard therapy and are currently available at most military facilities. Revisions to the initial TSF are based on pharmacoeconomic analyses of ambulatory disease states accounting for the majority of pharmaceutical expenditures. The PEC also develops treatment guidelines, preferred drug lists, and drug use evaluation criteria based on the results of each disease state analysis.
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Like doctors who would legislate less restrictive provider panels at HMOs, some drug makers are trying to muscle their products onto managed care formularies.
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