News and Commentary

What Drugs Are Covered? Safety, Efficacy Matter

Safety and medical effectiveness most determine whether a health plan will cover a new drug, according to a study in the March/April Health Affairs. Supported by the U.S. Agency for Healthcare Research and Quality, researchers polled chief medical officers or pharmacy managers at 53 plans.

The conclusions counter popular belief that price drives plans' coverage decisions. In a separate article in the same issue, the president of a Denver consulting company said MCOs whose formularies are based primarily on cost are missing an opportunity.

Formularies that rely on pharmacoeconomic evaluations, wrote J.D. Kleinke of Health Strategies Network, "will fulfill what may be managed care's most useful role ... to emerge as the broker of information to consumers about what kind of care works and what that care is worth." Drugs with no pharmacoeconomic benefit should be tagged with the highest copayments, he suggested, while those with proven cost savings "probably should be fully prepaid by the health plan."

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