Incentive Formularies Have Minimal Effect

Researchers at Harvard Medical School wanted to determine the effect of changes in drug benefit design on pharmaceutical use and spending. They observed prescription drug spending by plan and member and also formulary compliance, including use of generic medications and mail-order fulfillment.

Eligible enrollees were younger than 64, had prescription drug coverage provided by the health plan, and were drawn from 11 states.

Members who switched from a two-tier to a three-tier formulary had a decrease in total drug spending of 5 percent to 15 percent. Changing to an incentive formulary with higher copayments was accompanied by a small but inconsistent decrease in the use of nonformulary selections and a concomitant rise in both generic and “formulary preferred” utilization.

“Other studies suggest that there's a tremendous behavioral response when patients switch … to three-tier formularies,” says Bruce E. Landon, MD, MBA, lead author and associate professor of medicine and health care policy at Harvard Medical School. “There is a definite measurable response, but the response isn't as big as it's been touted to be.”