Psychiatric News May 20, 2005
Volume 40 Number 10
© 2005 American Psychiatric Association
p. 29
Insurers Turn to Escalating Copays As Cost-Containment Strategy
Mark Moran
Copayment increases associated with a three-tier formulary are found to
lower total spending on ADHD medications and decrease the probability of their
use.
Three-tier pharmacy formularies, adopted by many employers and health plans
to control costs, appear to be associated with a significant decrease in the
probability of using medications to treat children for
attention-deficit/hyperactivity disorder (ADHD).
Copayment increases associated with the implementation of a three-tier
formulary resulted in lower total ADHD medication spending by the employer,
sizable increases in out-of-pocket expenditures for families of children with
ADHD, and a significant decrease in the probability of using those
medications, according to a study in the April Archives of General
Psychiatry.
"There was no real effect on total spending, but simply a shift in
who was paying the bill, with the plan's share going down," lead author
Haiden Huskamp, Ph.D., told Psychiatric News.
She is an associate professor of health economics in the department of
health care policy at Harvard Medical School.
Three-tier formularies use copayment structures to encourage consumers to
choose products that are cost-effective. Typically, the first tier consists of
generic drugs, which have the lowest copayment; the second tier, which carries
a higher copayment, consists of brand-name drugs preferred by the payer; and
the third tier, which has the highest copayment, consists of brand-name drugs
not preferred by the payer.
In the study, Huskamp and colleagues compared the effects on ADHD
medication use and spending in one employer-sponsored plan with a three-tier
formulary.
The intervention group consisted of 20,326 enrollees. A comparison group
enrolled in the same managed care company consisted of 1,000 employer clients
without a three-tier formulary.
The researchers found that the three-tier formulary resulted in a
statistically significant decline in the rate of growth in the monthly
predicted probability of using an ADHD medication for the intervention group
compared with the comparison group. While rates of growth increased across the
board, the rate was slower for the intervention group.
The health plan's monthly spending for ADHD medication users decreased by
43 percent compared with that of the comparison group, while users' monthly
spending increased by 46 percent compared with that of the comparison
group.
Huskamp said ADHD medication users who had been using the medications prior
to implementation of the three-tier formulary were more likely than the
comparison group to switch medications from one tier to another; however,
change rates overall were low, she said. Moreover, prior users were not likely
to discontinue use of their medications. Rather, the decrease in the rate of
growth of monthly predicted probability of using an ADHD medication appeared
to be related to potential new users being less likely to start using the
medications.
Huskamp said that whether this represents a clinically appropriate decision
cannot be discerned from the data.
Nearly two-thirds of all workers with a prescription drug plan have a
three-tier formulary, she said.
"Clinicians have to be aware when they make prescribing decisions
what the potential cost implications may be for patients," she
observed.
An abstract of "Impact of 3-Tier Formularies on Drug Treatment
of Attention-Deficit/Hyperactivity Disorder in Children" is posted
online at
<http://archpsyc.ama-assn.org/cgi/content/abstract/62/4/435>.
Arch Gen Psychiatry 2005 62 435[Abstract/Free Full Text]
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