Spillover effects of restrictive drug formularies: a case study of PacifiCare in California.
BACKGROUND
A restrictive drug formulary may influence how physicians treat other, unaffiliated patients, a phenomenon known as the "spillover effect." In a previous study we found significant spillover effects from Maine's Medicaid formulary.


OBJECTIVE
To determine whether similar spillover effects exist for private insurers with less restrictive formularies and less dominant market presence.


METHODS
We treated PacifiCare's formulary changes for proton pump inhibitors (PPIs) as a natural experiment and studied whether these changes spilled onto non-PacifiCare patients in California. Rabeprazole and pantoprazole are the newly preferred PPI products.


METHODS
We analyzed the physician-level before-and-after changes in prescribing of rabeprazole and pantoprazole for PacifiCare and non-PacifiCare patients. We also estimated the effect of PacifiCare share of practice on spillover effects using linear regressions.


RESULTS
The number of rabeprazole and pantoprazole prescriptions increased simultaneously for non-PacifiCare patients and the increase was positively associated with PacifiCare share of practice. For non-PacifiCare prescriptions, a 10% increase in PacifiCare share of practice led to a 3.3% share increase for rabeprazole and a 1.6% share increase for pantoprazole, respectively (both P < .001).


CONCLUSIONS
PacifiCare's PPI formulary changes generated significant spillover effects onto non-PacifiCare patients in California.
Wang
Y Richard
YR
Public Policy Department, AstraZeneca Pharmaceuticals, Wilmington, Del 19850-5437, USA. y.richard.wang@astrazeneca.com
Pauly
Mark V
MV
D053799:2-Pyridinylmethylsulfinylbenzimidazoles; D000897:Anti-Ulcer Agents / Q000627:therapeutic use; D001562:Benzimidazoles / Q000627:therapeutic use; D002140:California; D005569:Formularies as Topic; D020793:Gatekeeping; D008329:Managed Care Programs; D009853:Omeprazole / Q000031:analogs & derivatives* / Q000627:therapeutic use; D019982:Organizational Case Studies; D000077402:Pantoprazole; D010817:Physician-Patient Relations; D064750:Rabeprazole; D013454:Sulfoxides / Q000627:therapeutic use
D053799:2-Pyridinylmethylsulfinylbenzimidazoles; D000897:Anti-Ulcer Agents; D001562:Benzimidazoles; D013454:Sulfoxides; D064750:Rabeprazole; D000077402:Pantoprazole; D009853:Omeprazole