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Previous Volume 349:2224-2232 December 4, 2003 Number 23 Next

	Full Text PDF PDA Full Text Perspective by Thomas, C. P. Letters Add to Personal Archive Add to Citation Manager Notify a Friend E-mail When Cited E-mail When Letters Appear PubMed Citation

ABSTRACT

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.

Source Information

From the Department of Health Care Policy, Harvard Medical School (H.A.H., R.G.F.); the Department of Health Policy and Management, Harvard School of Public Health (A.M.E.); and the Section on Health Services and Policy Research, Department of Medicine, Brigham and Women's Hospital (A.M.E.) — all in Boston; and Medco Health Solutions, Franklin Lakes, N.J. (P.A.D., R.S.E., K.A.M.).

Address reprint requests to Dr. Huskamp at the Department of Health Care Policy, Harvard Medical School, 180 Longwood Ave., Boston, MA 02115, or at huskamp{at}hcp.med.harvard.edu.

Full Text of this Article

Related Letters:

Effect of Incentive-Based Formularies on Drug Utilization and Spending
Shrank W. H., Sandy L. G., Heady T.
Extract | Full Text | PDF  
N Engl J Med 2004; 350:1057, Mar 4, 2004. Correspondence

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