Cost Is Not the Primary Factor Driving Managed Care Organizations' Decisions to Cover New Drugs

Research Alert: March 6, 2000

Contrary to popular belief, cost does not appear to be the primary factor influencing managed care organizations' (MCOs) decisions regarding coverage for pharmaceuticals. According to a new study of four common drugs, safety and medical effectiveness are the most significant factors influencing drug coverage policies. This study, published in the March 7 Health Affairs, was conducted by the Clinical Bioethics Department at the National Institutes of Health's Clinical Center and the Agency for Healthcare Research and Quality.

For the study, researchers queried either chief medical officers or internal pharmacy benefits managers of 53 managed care organizations about their coverage decisions regarding four new, expensive and controversial drugs: Enbrel and Celebrex, used to treat arthritis, Zyban for smoking cessation, and Viagra for erectile dysfunction. Nearly 100 percent of the responding MCOs surveyed offer coverage for Enbrel and Celebrex. In contrast, MCOs covered Viagra and Zyban much less frequently. The respondents often attributed this to the decisionmakers' belief that Viagra and Zyban are 'lifestyle improvement' drugs, and not necessary for the treatment of disease.

The researchers suggest that while benefit decisionmakers may see a clear distinction between diseases and lifestyle, such distinctions tend to be value-laden and controversial. These distinctions and the values they embody may need to be examined as pharmacy coverage decisions become increasingly complex and contentious.

Details are in "Pharmaceutical Benefits Decision-making: The Role of Dollars and Value," by Karen Titlow, M.A, Lauren Randel, M.D., Carolyn M. Clancy, M.D., and Ezekiel J. Emanuel, M.D., Ph.D.

Note to Editors: For further details or interviews, please contact Ms. Titlow at (215) 775-2874. For Drs. Emanuel and Randel, contact (301) 496-2429.

For more information, please contact AHRQ Public Affairs, (301) 427-1364.

Internet Citation:

Cost Is Not the Primary Factor Driving Managed Care Organizations' Decisions to Cover New Drugs. Research Alert, March 6, 2000. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/press/pr2000/pharmopr.htm