Arthur Lazarus, MD, MBA

Much more research is needed to determine the full effect of drug benefit designs, says the author, an official at AstraZeneca. Quality must be the foremost concern.

Arthur Lazarus, MD, MBA

Newer medications are extremely cost-effective treatments for many people with chronic conditions. Unfortunately, many persons are denied access to these medications because of requirements that these drugs be tied to prior authorization or have a preferred status when provided through public and private insurers.

Mechanisms for reducing drug spending include prescription limits, "fail-first" policies, and use of generics and tiered copayments. Taken together, such formulary restrictions may lead to adverse health consequences often reflected in greater use of medical services.

Drug benefits designed to shift costs to consumers and discourage use of expensive pharmaceuticals may lead to increased morbidity and mortality in high-risk populations such as the poor and the elderly, as well as individuals with certain chronic illnesses such as diabetes, asthma, depression, and schizophrenia.

Evidence surfaces

Evidence of formulary decisions harming patients with serious illnesses is just beginning to surface. For example, increasing copayments for prescription drugs may reduce patient use of these drugs, the Rand Corp. reported. In linking pharmacy claims data of patients who all had employer-sponsored health insurance with health benefit designs from 52 private health plans and 30 employers, researchers found that doubling copayments in a typical two-tier drug plan resulted in an approximately 45-percent reduction in the use of anti-inflammatory drugs and antihistamines.

In addition, there was a 35-percent drop in the use of cholesterol-reducing medications and drugs to treat asthma and ulcers, and a 25-percent decrease in use of medicines to treat high blood pressure, depression, and diabetes. Copayment increases led to increased use of emergency department visits and hospital days for some patients.

In another example, a prior authorization program for Michigan Medicaid recipients led to exacerbations of medical and mental health disorders, increased difficulty in performing daily activities, and medication-related side effects after patients were switched to a different type of medication. In New Hampshire, use of a three-prescription monthly payment limit (cap) increased overall care costs for those with schizophrenia seventeenfold, and patients experienced increased pain and suffering.

Reduced quality of health

Project Patient Care, a health care data collection organization, has estimated that more than a million older Americans have experienced negative health outcomes resulting from formulary restrictions, reducing their quality of health care. Furthermore, formulary restrictions may create a hassle for over-burdened physicians and for patients saddled with health problems.

Individuals who discontinue medications even temporarily because of their high cost, or engage in inappropriate use, such as switching and rationing their medication, may not be managed appropriately. In the mentally ill, lack of appropriate care can also trigger a downward spiral that ends in homelessness or incarceration.

Most attempts to improve patient care and safety have focused on reducing medical errors by clinicians. It is equally important to focus on unsafe policies, procedures, and regulations that contribute to patient harm. Scrutinizing formulary restrictions is a good first step. Formulary boards must ensure that their decisions do not undermine patient care, especially in high-risk groups.

Arthur Lazarus, MD, MBA, is the senior director of clinical research at AstraZeneca Pharmaceuticals in Wilmington, Del. He is editor of MD/MBA: Physicians on the New Frontier of Medical Management (American College of Physician Executives, 1998). He can be reached by e-mail at arthur.lazarus@

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