Impact of formulary restrictions on patient safety.

Although many new therapies are extremely cost effective for people with acute and chronic conditions, changes in drug benefits have been designed to shift costs to consumers and discourage use of expensive pharmaceuticals.

Increasingly, physician executives are becoming involved in deliberations related to the use of newer medications because of requirements that these drugs be "prior authorized" or have "preferred" status on a drug formulary.

Unfortunately, individuals may be denied access to the most effective medications, resulting in substantial morbidity and mortality in high-risk populations such as the poor and the elderly, as well as individuals with diabetes, asthma, mental illnesses and other conditions.

The negative health consequences of formulary restrictions are often reflected in greater use of medical services downstream.

Evidence surfaces

Evidence of formulary decisions harming patients with serious illnesses is just beginning to surface.

For example, increasing co-payments for prescription drugs may reduce patients' use of these drugs, the Rand Corporation reported. (1) In linking pharmacy claims data of patients who all had employer-sponsored health insurance with health benefit designs from 52 private health plans and 30 employers, researchers found that doubling co-payments in a typical two-tier drug plan resulted in an approximately 45 percent reduction in the use of anti-inflammatory drugs and antihistamines.

In addition, there was a 35 percent drop in the use of cholesterol-reducing medications and drugs to treat asthma and ulcers, and a 25 percent decrease in use of medicines to treat high blood pressure, depression and diabetes. Co-payment increases led to increased use of emergency department visits and hospital days for some patients.

In another example, a prior authorization program for Michigan Medicaid recipients led to exacerbations of medical and mental health disorders, increased difficulty in performing daily activities and medication-related side effects after patients were switched to a different type of medication. (2)

In New Hampshire, use of a three-prescription monthly payment limit (cap) increased overall care costs for those with schizophrenia by 17-fold and patients experienced increased pain and suffering. (3)

Reduced health care quality in seniors

Project Patient Care, in conjunction with Harris Interactive, has estimated that more than a million older Americans have experienced negative health outcomes resulting from formulary restrictions, reducing their quality of health care. (4)

In a prospective study that followed nearly 8,000 individuals over three years, University of Michigan researchers found that older adults who cut back on their prescription drugs because of cost were 76 percent more likely to manifest a significant decline in their overall health, including worse cardiovascular outcomes and increased rates of depression. (5)

Similar outcomes occurred in members of a California Medicare HMO upon implementation of a generic-only pharmacy benefit. In this study, based on claims data, lack of access to certain brand-name medication was associated with increased overall hospital admissions and a negative impact on selected measures of adherence to treatment guidelines, implying there were potential quality-of-care concerns. (6)

Individuals who discontinue medications even temporarily because of their high cost, or engage in inappropriate medication use behaviors such as switching and rationing their medication, may not be under adequate medical control. A worst-case scenario would find a patient in a medical crisis and perhaps hospitalized.

If not in the hospital, the individual might be under-performing at work or not on the job at all, so-called "presenteeism" and absenteeism. In the mentally ill, lack of appropriate care can trigger a downward spiral that ends in homelessness or incarceration.

Unsafe policies

Most attempts to improve patient care and safety focus on reducing medical errors by clinicians. It is equally important, however, to focus on unsafe policies, procedures and regulations that contribute to patient harm. Scrutinizing formulary restrictions is a good first step.

Formulary boards, including physician executives who serve on P & T committees, must ensure that their decisions do not undermine patient care and that their policies are administered with integrity by pharmacy benefits managers (PBMs).

The American Psychiatric Association and its Committee on Managed Care have developed questions aimed at uncovering best and worst practices among PBMs. (7) The questions focus on:

** The criteria PBMs use to determine formularies

** The way exceptions to the formulary are handled

** Methodology for detecting drug/drug interactions and disease/drug interactions, as well as the system for notifying physicians of these interactions

** How PBMs educate patients, ensure adherence to medications, and obtain feedback from patients regarding satisfaction

It is expected that answers will guide physician executives and health care administrators in their formulary decisions.

Cost containment strategies that selectively target medication utilization must maintain essential care and prevent compensatory spending on other health care services. The results of several studies to date, however, suggest that the reduction of drug costs achieved through various types of restrictions in drug formularies may occur at the expense of increased costs associated with other health care use (such as increased hospital admissions) and may compromise patient care.

Obviously, further research is needed to evaluate unintended consequences of formulary restrictions, especially in vulnerable populations. Additional research is needed to compare the effect of different formulary designs on the use of essential medicines, health outcomes and costs.

Research may shed light on the circumstances in which comprehensive medication coverage for individuals with chronic illnesses could result in cost savings by preventing acute events in the future.

Research also needs to inform health policy. Although policymakers are currently focusing on pharmacy benefits for Medicare-eligible adults, the University of Michigan study (5) indicated that supplemental prescription drug coverage might be needed for adults in late middle age who are not yet eligible for Medicare.

Apparently these individuals, too, are at increased risk of declining health as a result of formulary restrictions.

Arthur Lazarus, MD, MBA, CPE, FACPE, is senior director of clinical research for AstraZeneca Pharmaceuticals in Wilmington, Del. He is a frequent contributor to The Physician Executive and editor of MD/MBA: Physicians on the New Frontier of Medical Management (American College of Physician Executives, 1998). He can be reached at 302-885-4542 or [e-mail]. His opinions are not necessarily those of AstraZeneca, its management, agents, or employees.

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References

1. Goldman DP, Joyce GF, Escarce JJ, and others. "Pharmacy benefits and the use of drugs by the chronically ill." JAMA 2004: 291:2344-2350.

2. Miller JE. "Restricting access to medications hurts patients, their families, and their communities." Drug Benefit Trends 2003; 15(suppl 1):30-35.

3. Soumerai SB, McLaughlin TJ, Ross-Degnan D, and others. "Effects of limiting Medicaid drug-reimbursement benefits on the use of psychoptropic agents and acute mental health services by patients with schizophrenia." N Engl J Med 1994;331:650-655.

4. Drug plan formularies and restrictions can have a negative impact on the health of many older Americans. Project Patient Care. July 2002. Available at http://www.projectpatientcare.org. Accessed May 10, 2005.

5. Heisler M, Langa KM, Eby EL, and others. "The health effects of restricting prescription medication use because of cost." Med Care 2004; 42:626-634.

6. Christian-Herman J, Emons M, George D. "Effects of generic-only drug coverage in a Medicare HMO." Health Affairs (Web Exclusive), 10.1377/hlthaff.w4.455. Available at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.455. Accessed May 10, 2005.

7. Is your PBM making cost-effective decisions? American Psychiatric Association August 2004. Available at http://www.workplacementalhealth.org/mentalhealthworks/issues/MHW_1stQtr_2004.pdf. Accessed May 10, 2005.

By Arthur Lazarus, MD, MBA, CPE, FACPE

RELATED ARTICLE: Questions to Ask PBMs*

1. CRITERIA

** How are medications assessed for clinical effectiveness and safety?

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** Are clinicians with appropriate specially expertise included in the process?

** Which drugs go into which tier and why?

** What factors other than safety and efficacy are considered?

2. EXCEPTIONS

** How quickly are requests for formulary exceptions handled?

** Describe the denial and appeal process.

** Is the process transparent to patients, physicians and employers?

3. NOTIFICATION

** How do patients and physicians become aware of drug substitutions?

** How are they notified about potential side effects and drug interactions?

** How are patients informed about the PBM's policies and procedures?

4. COMPLIANCE

** How is patient adherence to medication monitored?

** What communications do patients receive: letters? phone calls?

** Are there clinical models to predict high-risk and noncompliant patients?

5. PATIENT EDUCATION

** How do patients receive drug education, especially information about the differences between generic and branded medications?

** Is there a care/disease management program available?

** Can patients self-enroll in the program, or are they identified and selected by the PBM?

6. FEEDBACK

** Are patient satisfaction surveys routinely conducted?

** Is claims data analyzed to inform future program administration and formulary design?

** What are the PBM's clinical benchmarks?

*Adapted from reference 7