title: Are incentive-based formularies inversely associated with drug utilization in managed care?
abstract: OBJECTIVE
  To review recent studies comprehensively assessing the impact of incentive-based multitier formularies on pharmaceutical costs and utilization.
  
  
  METHODS
  PubMed (2001-December 2003) was searched using the key terms formularies, cost-sharing, and drug costs.
  
  
  METHODS
  Studies addressing the impact of implementing multitiered incentive-based formularies as a central component of an outpatient drug benefit were selected.
  
  
  RESULTS
  One study using pharmacy claims from 25 employers with data from 402 786 members modeled the range of anticipated plan/employer savings associated with single- to 3-tier shifts and found that, going from a single- to 3-tier benefit results in decreased plan/employer pharmaceutical costs from $650 to $494 (24% decrease) per member per year and decreased pharmaceutical utilization from 12.3 to 9.4 (23.6% decrease) prescriptions per member per year. Another study demonstrated that adding an additional tier decreased pharmaceutical utilization, with a dramatic increase in member contribution offsetting the plan's expected increase in expenditures. This shift in pharmaceutical expenditures appeared to have no effect on overall medical utilization over a 3-year follow-up. Finally, a study converting members from a single- to 3-tier incentive-based formulary, associated with two- to fourfold copayment increases, resulted in a 10% discontinuation rate for angiotensin-converting enzyme inhibitors, statins, and proton-pump inhibitors among members who were primarily hourly employees. For salaried workers, the addition of a tier to their benefit appeared to have minimal impact on pharmaceutical utilization.
  
  
  CONCLUSIONS
  Emerging data suggest a potential inverse relationship between pharmaceutical utilization and incentive-based formularies that increase member contribution to drug costs. Future research should focus on identifying price points and percentage increases at which members are likely to begin discontinuing necessary medications.
authors.affiliation: Prime Therapeutics, LLC., Eagan, MN 55121-3497, USA. pgleason@primetherapeutics.com
authors.forename: Patrick P
authors.initials: PP
authors.lastname: Gleason
authors.forename: Brent W
authors.initials: BW
authors.lastname: Gunderson
authors.forename: Kristin R
authors.initials: KR
authors.lastname: Gericke
mesh_terms: D005252:Fees, Pharmaceutical; D006801:Humans; D008329:Managed Care Programs / Q000191:economics* / Q000706:statistics & numerical data; D004364:Pharmaceutical Preparations / Q000191:economics*; D012052:Reimbursement, Incentive / Q000191:economics* / Q000706:statistics & numerical data
chemical_list: D004364:Pharmaceutical Preparations