Determinants of HMO formulary adoption decisions.
OBJECTIVE
To identify economic and organizational characteristics that affect the likelihood that health maintenance organizations (HMOs) include new drugs on their formularies.


METHODS
We administered an original survey to directors of pharmacy at 75 HMOs, of which 41 returned usable responses. We obtained drug-specific data from an industry trade journal.


METHODS
We performed multivariate logistic regression analysis, adjusting for fixed-drug effects and random-HMO effects. We used factor analysis to limit the number of predictors.


METHODS
We held initial focus groups to help with survey design. We administered the survey in two waves. We asked respondents to report on seven popular new drugs, and to describe a variety of HMO organizational characteristics.


RESULTS
Several HMO organizational characteristics, including nonprofit status, the incentives facing the director of the pharmacy, size and make-up of the pharmacy and therapeutics committee, and relationships with drugs makers, all affect formulary adoption.


CONCLUSIONS
There are many organizational factors that may cause HMOs to make different formulary adoption decisions for certain prescription drugs.
Dranove
David
D
Kellogg School of Management, Northwestern University, Evanston, IL, USA.
Hughes
Edward F X
EF
Shanley
Mark
M
D003659:Decision Making, Organizational; D004059:Diffusion of Innovation; D016527:Drug Costs; D011307:Drug Prescriptions; D004363:Drug Utilization / Q000592:standards; D017144:Focus Groups; D005569:Formularies as Topic; D019538:Health Care Surveys; D006279:Health Maintenance Organizations / Q000458:organization & administration* / Q000592:standards; D006801:Humans; D016015:Logistic Models; D010606:Pharmacy and Therapeutics Committee / Q000458:organization & administration; D011795:Surveys and Questionnaires; D014481:United States