A Bitter Pill

Formulary Variability and the Challenge to Prescribing Physicians

Published in: Journal of the American Board of Family Practice, v. 17, no. 6, Nov.-Dec. 2004, p. 401-407

Posted on RAND.org on December 31, 2003

by William H. Shrank, Susan L. Ettner, Peter Glassman, Steven M. Asch

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BACKGROUND: Multitiered, incentive-based formularies have been increasingly used as a mechanism to control prescription drug expenditures. Prescribing physicians who manage patients from multiple insurers must be familiar with the variability in their patients' formulary incentives to help patients choose therapy wisely. However, the degree of formulary variability among and within health plans over time is unclear. METHODS: In 6 major health plans in California, the authors evaluated formulary incentive variability in 4 of the 5 drug classes with the highest expenditures in California: proton pump inhibitors, hydroxymethylglutaryl coenzyme A reductase inhibitors (statins), calcium channel blockers, and angiotensin-converting enzyme inhibitors. The authors categorized 20 branded members of these classes into either preferred or nonpreferred/uncovered categories. They calculated the consistency that brands were preferred across health plans and the frequency of changes in formulary status for each drug within plans between 2000 and 2002. RESULTS: None of the branded drugs evaluated were preferred on all formularies in 2002, and 10% were not available on any of the formularies. Formulary status varied greatly across plans, and more than 60% of drugs were preferred on 2 to 4 of the 6 formularies studied. Formulary status within health plans varied between 2000 and 2002 in more than half of the plans in the drug classes evaluated. CONCLUSIONS: In the drug classes evaluated, over a 2-year period, considerable variability was seen among and within formularies over time. This variability poses a challenge to physicians who wish to reduce patients' expenditures by prescribing the least expensive among similarly effective drugs within a drug class. This variability is especially relevant because recent legislation increases the likelihood that more Medicare beneficiaries will receive their medications from private health plans.

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