Prescription Drug Formulary Research Articles

Substance use disorder treatment carve outs in Medicaid managed care

IntroductionMedicaid managed care organizations (MCO) play a major role in addressing the nation's epidemic of drug overdose and mortality by administering substance use disorder (SUD) treatment benefits for over 50 million Americans. While it is known that some Medicaid MCO plans delegate responsibility for managing SUD treatment benefits to an outside “carve out” entity, the extent and structure of such carve out arrangements are unknown. This is an important gap in knowledge, given that carve outs have been linked to reductions in rates of SUD treatment receipt in several studies. To address this gap, we examined carve out arrangements used by Medicaid MCO plans to administer SUD treatment benefits in ten states. MethodsData for this study was gleaned using a purposive sampling approach through content analysis of publicly available benefits information (e.g., member handbooks, provider manuals, prescription drug formularies) from 70 comprehensive Medicaid MCO plans in 10 selected states (FL, GA, IL, MD, MI, NH, OH, PA, UT, and WV) active in 2018. Each Medicaid MCO plan's documents were reviewed and coded to indicate whether a range of SUD treatment services (e.g., inpatient treatment, outpatient treatment, residential treatment) and medications were carved out, and if so, to what type of entity (e.g., behavioral health organization). ResultsA large majority of Medicaid MCO plans carved out at least some (28.6 %) or all (40.0 %) SUD treatment services, with nearly all plans carving out some (77.1 %) or all (14.3 %) medications, mainly due to the carving out of methadone treatment. Medicaid MCO plans most commonly carved out SUD treatment services to behavioral health organizations, while most medications were carved out to state Medicaid fee-for-service plans. ConclusionsCarve out arrangements for SUD treatment vary dramatically across states, across plans, and even within plans. Given that some studies have linked carve out arrangements to reductions in treatment access, their widespread use among Medicaid MCO plans is cause for further consideration by policymakers and other key interest groups. Moreover, reliance on such complex arrangements for administering care may create challenges for enrollees who seek to learn about and access plan benefits.

The impact of a national formulary expansion on diabetics.

This paper estimates the causal effect of the expansion of Colombia's national prescription drug formulary to include five new types of insulin on the healthcare utilization and costs of type I diabetics and explores the mechanisms through which outpatient cost reductions are realized. We find that expanded coverage generates an increase in the cost of insulin for type I diabetics equal to 17% of their baseline healthcare costs. At the same time, their annual outpatient care utilization falls by 1.9 claims. We devise tests to explore the relative importance of two mechanisms by which the expansion may have lowered type I diabetics' non-drug healthcare utilization: spillovers from drug to non-drug spending and rationing of care. We find no evidence that the formulary expansion reduces the rate of complications from diabetes and find substantial declines in non-drug costs even among the subset of diabetics with no scope for spillovers. We find large reductions in the utilization of discretionary care including diagnostic tests, but no such declines for the use of essential drugs, suggesting that rationing of care is the primary driver of observed cost savings.

Trends in Medicare Part D coverage of generics with equivalent brand-name drugs.

To evaluate whether increased placement of generic drugs on higher cost-sharing tiers in Medicare Part D is associated with coverage of multisource brand-name drugs, plan type, or product characteristics. Descriptive study of Medicare Prescription Drug Formulary Files. We analyzed plan coverage and tiering of brand-name drugs and matched generics from 2013-2019. We compared tiering changes and estimated out-of-pocket spending by tier for all Part D plans and by plan type (Medicare Advantage prescription drug [MA-PD] vs stand-alone prescription drug plan [PDP]) for covered generic drugs. Finally, we identified the generic products commonly placed on higher tiers in 2019 and categorized them based on clinical characteristics. Across 5,220,488 plan-product combinations in 2019, 76.4% of generic drug observations reflected coverage on Part D plan formularies, compared with only 12.1% of brand-name drugs. Between 2013 and 2019, the share of observations reflecting covered generics on lower tiers decreased from 76.8% to 53.9%, whereas the share on higher tiers increased from 7.5% to 28.0%. MA-PD plans were more likely than PDPs to place generic drugs on lower tiers, even among plan sponsors offering both plan types. Despite these trends, higher tier placement does not appear to be related to more generous coverage of brand-name products. Instead, in 2019, 70% of high-tier generics had multiple formulations, required heightened clinical monitoring, or had head-to-head treatment options available. Although Part D plans have increasingly placed covered generic drugs on higher formulary tiers over time, this may be partly explained by a drug's clinical profile and availability of substitutes rather than preferred brand-name drug coverage.

Student knowledge and confidence with prescribing hormonal contraception

IntroductionPharmacists' scope of practice has expanded in several states to include independently prescribing and dispensing hormonal contraceptive products. The objective of this research was to assess student knowledge and confidence with prescribing hormonal contraception following a simulated patient case activity. MethodsThis was a descriptive, exploratory, nonexperimental study utilizing educational assessments and survey data from second professional year students during the 2017 to 2018 and 2018 to 2019 academic years. Student performance was assessed using a five-question readiness assurance test at the beginning of class, documented patient assessment and plan, and five-question post-activity quiz. Student confidence with interpreting legal regulations and following protocol instructions, performing a patient assessment, prescribing an appropriate contraceptive product, and providing verbal and written communication to patients and providers was assessed using a nine-question survey at the end of class. ResultsAverage student performance was consistent on the readiness assurance test between the two years. Students scored an average of 84.2% and 91.6% on the documented assessment and plan and 96.4% and 91.2% on the post-activity quiz for each year, respectively. Students felt most confident with navigating and interpreting a prescription drug formulary, providing the patient with written documentation, and communicating with the patient's prescriber. Students were less confident with selecting an appropriate product based on patient-specific factors and providing education on missed doses. ConclusionsThis case-based activity demonstrated student knowledge and confidence with prescribing hormonal contraceptives.

Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges.

We study insurers' use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types. A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening. The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard.

MH Parity Remains Elusive as States Fail to Enforce Law

MH Parity Remains Elusive as States Fail to Enforce Law

Data Linkages to Study Pharmaceutical Health Services Delivery: Three Applied Examples

IntroductionThe safe, effective, and efficient use of pharmaceutical health services is a critical area of public health and social policy. Implementation and monitoring studies often use single data sources but require diverse data elements pertaining to patients and health services. Linking multiple data sources may enable more comprehensive studies.
 Objectives and ApproachThe objective of this presentation is to describe three applied pharmaceutical health services projects in the United States that use data linkage to support program monitoring. A conceptual model was defined including the following key domains: (1) contextual determinants; (2) pharmacy service availability and coverage by payers; (3) receipt/use of services by patients; and (4) outcomes such as clinical outcomes, patient satisfaction and healthcare costs. Applied studies were selected to illustrate data linkage across different domains. For each study, we present the data sources used and the domains addressed by each data source. We also describe the linkage process.
 ResultsStudy 1 assesses distance between patients and pharmacies in-network for health plans. It determined pharmacy address and patient ZIP code using several Medicare datasets and calculated driving distance using geocoding software.
 Study 2 measures if patients targeted for services receive an intervention designed to prevent adverse drug events and improve patient health outcomes while reducing healthcare costs. Targeted beneficiaries are determined using Medicare administrative data and delivery of services is assessed based on a custom-developed encounter data set, linked by beneficiary.
 Study 3 examines the association between prescription drug formulary design, medication use, and cost and health outcomes. For this, formulary data are obtained from a commercial source and utilization/outcomes data from commercial claims data. These datasets are linked by payer.
 Conclusion/ImplicationsMany data sources are available for pharmaceutical health services research studies and linkage can be made at the patient, region, or payer level to support program monitoring and evaluation. Data linkage enables the inclusion of multiple domains, although multiple linkages and/or custom data may be needed for more complex studies.

Five States Pass Laws to Improve Compliance With MH Parity Laws

Five States Pass Laws to Improve Compliance With MH Parity Laws

0411 Trends in Insomnia Prescription MedicTrends in Insomnia Prescription Medication Use Among Medicare Beneficiaries, 2006–2013

Traditional pharmacotherapy for insomnia has known adverse outcomes among older adults, including falls and cognitive impairment. However, few studies have characterized longitudinal insomnia-related medication trends among Medicare beneficiaries. These characteristics are of particular interest given the recent (2012) inclusion of benzodiazepines in the Medicare prescription drug formulary. The objective of this study was to characterize trends in insomnia-related prescription medication use among Medicare beneficiaries over a seven-year period. We conducted a time-series analysis to estimate the annual prevalence of use of insomnia medications using a 5% sample of Medicare fee-for-service beneficiaries from 2006–2013. Insomnia medication use (defined as at least 1 fill annually) was identified by searching the Part D prescription drug claims and included insomnia-related medication classes and drugs: barbiturates, benzodiazepines, chloral hydrate, hydroxyzine, non-benzodiazepine sedative hypnotics (NBSH), and sedating anti-depressants. Prevalence of insomnia medication use ranged from 20.8% in 2006 to 23.4% in 2013 (p>.10). Benzodiazepine use increased from 0.5% in 2012 to 8.0% in 2013 (p = 0.03). Use of sedating antidepressants and NBSH decreased modestly from 9% and 8%, respectively, in 2006 through 2013. Prevalence of sedating antidepressant, NBSH, and hydroxyzine use was higher among women than men (p<0.001 for all). Benzodiazepine and sedating antidepressant use was most common among those age <65 and ≥85 years. NBSH use was most common among those age <65 years. Use of all drugs was similar among those ages 65 - 74 years and 75 - 84 years. Prevalence of insomnia medication use remained high among Medicare beneficiaries from 2006 - 2013, particularly among women. Benzodiazepine use increased sharply following inclusion in the Medicare formulary. Future studies should examine population-level outcomes associated with this increased use of benzodiazepines. Merck Investigator Initiated Studies Program (PI: Wickwire).

What is Single-Payer Health Care? A Review of Definitions and Proposals in the U.S.

Single-payer systems have been proposed as a health care reform alternative in the United States. However, there is no consensus on the definition of single-payer. Most definitions characterize single-payer as one entity that collects funds and pays for health care on behalf on an entire population. Increased flexibility for state health care reform may provide opportunities for state-based single-payer systems to be considered. To explore the concept of single-payer and to describe the contents of single-payer health care proposals. We compared single-payer definitions and proposals. We coded the proposal text for provisions that would change how the health care system functions and could impact health care access, quality, and cost. The share of proposals that include changes to the financing, pooling, purchasing, and delivery of health care; and possible impact on access, quality, and costs. We identified 25 proposals for national or state single-payer plans from journal and legislative databases. The proposals typically call for wide-ranging reform; nearly all include changes across the financing, pooling, purchasing, and delivery of health care services. Many provisions aiming to improve access, quality, and cost containment are also included, but the proposals vary in how they plan to achieve these improvements. Common provisions are related to comprehensive benefits, patient choice of providers, little or no cost sharing, the role of private insurance, provider guidelines and standards, periodic reviews of the benefits package, electronic medical records and billing, prescription drug formulary, global budgets, administrative cost thresholds, payment reform and studies, and the authority to implement cost-containment strategies. Single-payer systems are heterogeneous. Acknowledgment of what is considered as single-payer and the characteristics that are variable is important for nuanced policy discussions on specific reform proposals.

Computational health economics for identification of unprofitable health care enrollees.

SUMMARYHealth insurers may attempt to design their health plans to attract profitable enrollees while deterring unprofitable ones. Such insurers would not be delivering socially efficient levels of care by providing health plans that maximize societal benefit, but rather intentionally distorting plan benefits to avoid high-cost enrollees, potentially to the detriment of health and efficiency. In this work, we focus on a specific component of health plan design at risk for health insurer distortion in the Health Insurance Marketplaces: the prescription drug formulary. We introduce an ensembled machine learning function to determine whether drug utilization variables are predictive of a new measure of enrollee unprofitability we derive, and thus vulnerable to distortions by insurers. Our implementation also contains a unique application-specific variable selection tool. This study demonstrates that super learning is effective in extracting the relevant signal for this prediction problem, and that a small number of drug variables can be used to identify unprofitable enrollees. The results are both encouraging and concerning. While risk adjustment appears to have been reasonably successful at weakening the relationship between therapeutic-class-specific drug utilization and unprofitability, some classes remain predictive of insurer losses. The vulnerable enrollees whose prescription drug regimens include drugs in these classes may need special protection from regulators in health insurance market design.

Constraints on Formulary Design Under the Affordable Care Act.

I study the effect of prescription drug essential health benefits (EHB) requirements from the Affordable Care Act on prescription drug formularies of health insurance marketplace plans. The EHB regulates the number of drugs covered but leaves other dimensions (cost sharing and utilization management) of the formulary unregulated. Using data on almost all formularies in the country, I demonstrate that requiring insurers to cover one additional drug adds 0.22 drugs (3.3%) to the average formulary, mostly owing to firms increasing the number of drugs covered to comply with the EHB requirement. The EHB requirement also increases the probability that a drug is subject to utilization management and is assigned to a higher (more costly) formulary tier. My results suggest that newly covered drugs are 22.3 percentage points more likely to be subject to utilization management, compared to 36.7% for the average covered drug. Using formularies for Medicare Advantage plans, which are subject to uniform, nationwide benefit design standards, and the formulary status of newly approved drugs that do not satisfy the EHB requirement, I reject the hypotheses that consumer demand or effects on plan entry can explain my results. Copyright © 2017 John Wiley & Sons, Ltd.

Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges

By steering patients to cost-effective substitutes, the tiered design of prescription drug formularies can improve the efficiency of healthcare consumption in the presence of moral hazard. However, a long theoretical literature describes how contract design can also be used to screen consumers by profitability. In this paper, we study this type of screening in the ACA Health Insurance Exchanges. We first show that despite large regulatory transfers that neutralize selection incentives for most consumer types, some consumers are unprofitable in a way that is predictable by their prescription drug demand. Then, using a difference-in-differences strategy that compares Exchange formularies where these selection incentives exist to employer plan formularies where they do not, we show that Exchange insurers design formularies as screening devices that are differentially unattractive to unprofitable consumer types. This results in inefficiently low levels of coverage for the corresponding drugs in equilibrium. Although this type of contract distortion has been highlighted in the prior theoretical literature, until now empirical evidence has been rare. The impact on out-of-pocket costs for consumers affected by the distortion is substantial -- potentially thousands of dollars per year -- and the distortion creates an equilibrium in which contracts that efficiently trade off moral hazard and risk protection cannot exist.

Mind the Gap: Why Closing the Doughnut Hole Is Insufficient for Increasing Medicare Beneficiary Access to Oral Chemotherapy.

Orally administered anticancer medications are among the fastest growing components of cancer care. These medications are expensive, and cost-sharing requirements for patients can be a barrier to their use. For Medicare beneficiaries, the Affordable Care Act will close the Part D coverage gap (doughnut hole), which will reduce cost sharing from 100% in 2010 to 25% in 2020 for drug spending above $2,960 until the beneficiary reaches $4,700 in out-of-pocket spending. How much these changes will reduce out-of-pocket costs is unclear. We used the Medicare July 2014 Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files from the Centers for Medicare & Medicaid Services for 1,114 stand-alone and 2,230 Medicare Advantage prescription drug formularies, which represent all formularies in 2014. We identified orally administered anticancer medications and summarized drug costs, cost-sharing designs used by available plans, and the estimated out-of-pocket costs for beneficiaries without low-income subsidies who take a single drug before and after the doughnut hole closes. Little variation existed in formulary design across plans and products. The average price per month for included products was $10,060 (range, $5,123 to $16,093). In 2010, median beneficiary annual out-of-pocket costs for a typical treatment duration ranged from $6,456 (interquartile range, $6,433 to $6,482) for dabrafenib to $12,160 (interquartile range, $12,102 to $12,262) for sunitinib. With the assumption that prices remain stable, after the doughnut hole closes, beneficiaries will spend approximately $2,550 less. Out-of-pocket costs for Medicare beneficiaries taking orally administered anticancer medications are high and will remain so after the doughnut hole closes. Efforts are needed to improve affordability of high-cost cancer drugs for beneficiaries who need them.

The Affordable Care Act, health care reform, prescription drug formularies and utilization management tools.

The U.S. Patient Protection and Affordable Care Act (hence, Affordable Care Act, or ACA) was signed into law on March 23, 2010. Goals of the ACA include decreasing the number of uninsured people, controlling cost and spending on health care, increasing the quality of care provided, and increasing insurance coverage benefits. This manuscript focuses on how the ACA affects pharmacy benefit managers and consumers when they have prescriptions dispensed. PBMs use formularies and utilization control tools to steer drug usage toward cost-effective and efficacious agents. A logic model was developed to explain the effects of the new legislation. The model draws from peer-reviewed and gray literature commentary about current and future U.S. healthcare reform. Outcomes were identified as desired and undesired effects, and expected unintended consequences. The ACA extends health insurance benefits to almost 32 million people and provides financial assistance to those up to 400% of the poverty level. Increased access to care leads to a similar increase in overall health care demand and usage. This short-term increase is projected to decrease downstream spending on disease treatment and stunt the continued growth of health care costs, but may unintentionally exacerbate the current primary care physician shortage. The ACA eliminates limitations on insurance and increases the scope of benefits. Online health care insurance exchanges give patients a central location with multiple insurance options. Problems with prescription drug affordability and control utilization tools used by PBMs were not addressed by the ACA. Improving communication within the U.S. healthcare system either by innovative health care delivery models or increased usage of health information technology will help alleviate problems of health care spending and affordability.

A Synthesis of Drug Reimbursement Decision-Making Processes in Organisation for Economic Co-operation and Development Countries

BackgroundThe use of a restrictive formulary, with placement determined through a drug-reimbursement decision-making process, is one approach to managing drug expenditures. ObjectiveTo describe the processes in drug reimbursement decision-making systems currently used in national publicly funded outpatient prescription drug insurance plans. MethodsBy using the Organisation for Economic Co-operation and Development (OECD) nations as the sampling frame, a search was done in the published literature, followed by the gray literature. Collected data were verified by a system expert within the prescription drug insurance plan in each country to ensure the accuracy of key data elements across countries. ResultsAll but one country provided at least one publicly funded prescription drug formulary. Many systems have adopted similar processes of drug reimbursement decision making. All but three systems required additional consideration of clinical evidence within the decision-making process. Transparency of recommendations varied between systems, from having no information publicly available (three systems) to all information available and accessible to the public (16 systems). Only four countries did not consider cost within the drug reimbursement decision-making process. ConclusionsThere were similarities in the decision-making process for drug reimbursement across the systems; however, only five countries met the highest standard of transparency, requirement of evidence, and ability to appeal. Future work should focus on examining how these processes may affect formulary listing decisions for drugs between countries.

Improving Medication Management of Depression in Health Plans

Improving Medication Management of Depression in Health Plans

United States Pharmacopeia Development of the Medicare Model Formulary Guidelines

Prescription drug formularies are a key element in prescription drug benefit management. The use of formularies can both increase the quality of prescribing and reduce the costs of prescription drug therapy. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 specified that an external agency, the United States Pharmacopeial Convention, Inc. (USP) through the Secretary of the United States Department of Health and Human Services develop model formulary guidelines for prescription drug plans. The model formulary guidelines are to assist individual drug plans in developing formularies that would qualify for participation in the Medicare Part D prescription program. The guidelines were developed through a Model Guidelines Expert Committee assisted by USP staff and following input from patient advocate groups, health care organizations, and pharmaceutical organizations over a period of 8 months (April 2004 to December 2004). The USP Model Formulary Guidelines organize prescription medications into 41 therapeutic categories (32 with associated pharmacologic classes and nine with no associated pharmacologic classes), 137 pharmacologic classes, and 146 unique therapeutic categories and pharmacologic classes.

The Impact of a Three‐Tier Formulary on Demand Response for Prescription Drugs

A large number of health plans and employers have adopted three‐tier prescription drug formularies in an effort to control rising prescription drug costs. We assessed the behavioral response to three‐tier adoption by estimating econometric models of the probability of selecting drugs assigned to the third tier with the highest co‐payment requirement and changes in expected out‐of‐pocket (OOP) spending. We concluded that implementation of the three‐tier formulary resulted in some shifting of costs from the plan to enrollees and some bargaining power gained for the payer, with plan savings from manufacturer rebates a likely result.

Prescription drug formularies in managed care: concerns for the elderly population

Prescription drug formularies are a key element in the rapidly growing trend of prescription drug benefit management. The use of formularies can increase the quality of prescribing and reduce the costs of prescription drug therapy. This is particularly important to older Americans, who represent about 13% of the population but consume roughly one third of the drugs prescribed in the United States. However, the question of whether the use of formularies affects patient access to pharmaceuticals has not been analyzed sufficiently. This paper identifies benefits and risks to older Americans from the use of prescription drug formularies by third-party payers, analyzes the evidence of those benefits and risks, and proposes areas for future research. An extensive review and synthesis of the literature were performed, focusing on three aspects of drug formulary design: (1) the extent to which health maintenance organizations and insurers consider consumer interests when using formularies; (2) the extent to which formulary design is affected by clinical and economic considerations; and (3) the impact of formularies on the quality of drug care received. Safeguards to guarantee that economic considerations of drug benefit managers do not restrict access to needed drugs are insufficient. Alternatively, no evidence to date shows that the use of formularies adversely affects patients' access to pharmaceutical care. More research is required to understand the process of drug formulary development and the extent to which different formulary recommendations impede on physicians' ability to provide high-quality care.