Health Care Costs and Financing

Introduction of a multitiered formulary decreases antidepressant use

The great majority of U.S. health plans use multitiered formularies because they offer a means to contain prescription drug costs. With this business model, health plans sort drugs by price into tiers, and patients' copayments are linked to the tier their drug falls within. For example, if a patient is prescribed a medication that falls within the "nonpreferred" tier, the patient must either pay more out of pocket to get the drug or request the physician write a prescription for a medication that falls in a preferred, more affordable tier.

Dominic Hodgkin, Ph.D., of Brandeis University, and colleagues examined how a managed care organization's introduction of a three-tiered formulary in 2000 affected enrollee copayments and drug use for antidepressant prescriptions. The plan's copayment for generics was $5, for preferred brand drugs was $10, and for nonpreferred drugs was $25. Because the new formulary was phased in during the year, researchers were able to compare costs and use for 45,197 members who were subject to the new formulary with 64,489 members who were not.

The three-tier program reduced both the probability of using an antidepressant and the spending per user. Prescriptions per enrollee declined 11 percent for enrollees who were in the experimental group (where some antidepressants were placed on a nonpreferred tier). However, prescriptions per enrollee increased 5 percent in the comparison group. Though their higher copayments apparently caused a shift away from nonpreferred drugs, some patients continued to use those antidepressants. This may be in part because their physicians believed those nonpreferred drugs worked better and were unwilling to switch patients to preferred antidepressants or patients refused to settle for any drug but the one initially prescribed.

Certain antidepressants work better than others for some patients, which may be one reason the response to the three-tier formularies is more muted for antidepressants than has been shown for other drug classes, such as statins, explain the researchers. Their study was funded in part by the Agency for Healthcare Research and Quality (HS13092).

See "The effect of a three-tier formulary on antidepressant utilization and expenditures," by Dr. Hodgkin, Cindy Parks Thomas, Ph.D., Linda Simoni-Wastila, Ph.D., and others in the June 2008 Journal of Mental Health Policy and Economics 11(2), pp. 67-77.

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