Impact of 3-tier formularies on drug treatment of attention-deficit/hyperactivity disorder in children.
BACKGROUND
Expenditures for medications used to treat attention-deficit/hyperactivity disorder (ADHD) in children have increased rapidly. Many employers and health plans have adopted 3-tier formularies in an attempt to control costs for these and other drugs.


OBJECTIVE
To assess the effect of copayment increases associated with 3-tier formulary adoption on use and spending patterns for ADHD medications for children.


METHODS
Observational study using quasi-experimental design to compare effects on ADHD medication use and spending for children enrolled as dependents in an employer-sponsored plan that made major changes to its pharmacy benefit design and a comparison group of children covered by the same insurer. The plan simultaneously moved from a 1-tier (same copayment required for all drugs) to a 3-tier formulary and implemented an across-the-board copayment increase. The plan later moved 3 drugs from tier 3 to tier 2.


METHODS
An intervention group of 20 326 and a comparison group of 15 776 children aged 18 years and younger.


METHODS
Monthly probability of using an ADHD medication; plan, enrollee, and total ADHD medication spending; and medication continuation.


RESULTS
A 3-tier formulary implementation resulted in a 17% decrease in the monthly probability of using medication (P<.001), a 20% decrease in expected total medication expenditures, and a substantial shifting of costs from the plan to families (P<.001). Intervention group children using medications in the pre-period were more likely to change to a medication in a different tier after 3-tier adoption, relative to the comparison group (P = .08). The subsequent tier changes resulted in increased plan spending (P<.001) and decreased patient spending (P = .003) for users but no differences in continuation.


CONCLUSIONS
The copayment increases associated with 3-tier formulary implementation by 1 employer resulted in lower total ADHD medication spending, sizeable increases in out-of-pocket expenditures for families of children with ADHD, and a significant decrease in the probability of using these medications.
Huskamp
Haiden A
HA
Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA 02115, USA. huskamp@hcp.med.harvard.edu
Deverka
Patricia A
PA
Epstein
Arnold M
AM
Epstein
Robert S
RS
McGuigan
Kimberly A
KA
Muriel
Anna C
AC
Frank
Richard G
RG
D000293:Adolescent; D001289:Attention Deficit Disorder with Hyperactivity / Q000188:drug therapy*; D000697:Central Nervous System Stimulants / Q000191:economics / Q000627:therapeutic use; D002648:Child; D017047:Cost Sharing / Q000191:economics* / Q000706:statistics & numerical data; D017277:Drug Approval; D016527:Drug Costs / Q000706:statistics & numerical data; D011307:Drug Prescriptions / Q000191:economics* / Q000706:statistics & numerical data; D017723:Drug Utilization Review; D016568:Drugs, Generic / Q000191:economics / Q000627:therapeutic use; D005260:Female; D005569:Formularies as Topic; D006264:Health Benefit Plans, Employee / Q000191:economics* / Q000706:statistics & numerical data; D006801:Humans; D007356:Insurance, Pharmaceutical Services / Q000191:economics; D008297:Male; D008329:Managed Care Programs / Q000191:economics / Q000706:statistics & numerical data; D008774:Methylphenidate / Q000191:economics / Q000627:therapeutic use; D011306:Prescription Fees / Q000706:statistics & numerical data; D012052:Reimbursement, Incentive / Q000191:economics / Q000706:statistics & numerical data; D014481:United States
D000697:Central Nervous System Stimulants; D016568:Drugs, Generic; D008774:Methylphenidate