Abstract
Association Between Waste-Free Formularies and Prescription Drug Spending Among Self-insured Employers
Highlights
Wasteful prescription drug spending arises when drugs are therapeutically appropriate but cost substantially more for the same clinical benefit as their therapeutic alternatives.[1]
For employer 1, these drugs represented 10% of all drugs covered in its formulary, 9% of the covered therapeutic classes, and 29% of all pharmacy claims
For employer 2, these drugs represented 14% of all drugs covered in its formulary, 3% of the covered therapeutic classes, and 17% of all pharmacy claims
Summary
Wasteful prescription drug spending arises when drugs are therapeutically appropriate but cost substantially more for the same clinical benefit as their therapeutic alternatives.[1] Because these drugs and their alternatives (eg, an expensive proprietary product and its less expensive generic equivalent) have the same clinical outcomes, wasteful drug spending differs categorically from unnecessary or inappropriate use.[2,3] Recently, some self-insured employers have implemented waste-free formularies to contain drug spending, but the results have not yet been documented in the literature.[4,5]. This study examines the experience of 2 large self-insured employers that shared per-member per-month (PMPM) spending information, net of rebates and discounts, before and after the implementation of their waste-free formularies. Employer 1, a large public employer, spends approximately $200 million annually on prescription drugs for more than 300 000 beneficiaries. Employer 2, a publicly traded Fortune 500 company, spends approximately $100 million annually on prescription drugs for more than 60 000 beneficiaries
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