Impact of formulary restrictions on patient safety

Physician Executive, July-August, 2005 by Arthur Lazarus

Although many new therapies are extremely cost effective for people with acute and chronic conditions, changes in drug benefits have been designed to shift costs to consumers and discourage use of expensive pharmaceuticals.

Increasingly, physician executives are becoming involved in deliberations related to the use of newer medications because of requirements that these drugs be "prior authorized" or have "preferred" status on a drug formulary.

Unfortunately, individuals may be denied access to the most effective medications, resulting in substantial morbidity and mortality in high-risk populations such as the poor and the elderly, as well as individuals with diabetes, asthma, mental illnesses and other conditions.

The negative health consequences of formulary restrictions are often reflected in greater use of medical services downstream.

Evidence surfaces

Evidence of formulary decisions harming patients with serious illnesses is just beginning to surface.

For example, increasing co-payments for prescription drugs may reduce patients' use of these drugs, the Rand Corporation reported. (1) 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 co-payments 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. Co-payment 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. (2)

In New Hampshire, use of a three-prescription monthly payment limit (cap) increased overall care costs for those with schizophrenia by 17-fold and patients experienced increased pain and suffering. (3)

Reduced health care quality in seniors

Project Patient Care, in conjunction with Harris Interactive, has estimated that more than a million older Americans have experienced negative health outcomes resulting from formulary restrictions, reducing their quality of health care. (4)

In a prospective study that followed nearly 8,000 individuals over three years, University of Michigan researchers found that older adults who cut back on their prescription drugs because of cost were 76 percent more likely to manifest a significant decline in their overall health, including worse cardiovascular outcomes and increased rates of depression. (5)

Similar outcomes occurred in members of a California Medicare HMO upon implementation of a generic-only pharmacy benefit. In this study, based on claims data, lack of access to certain brand-name medication was associated with increased overall hospital admissions and a negative impact on selected measures of adherence to treatment guidelines, implying there were potential quality-of-care concerns. (6)

Individuals who discontinue medications even temporarily because of their high cost, or engage in inappropriate medication use behaviors such as switching and rationing their medication, may not be under adequate medical control. A worst-case scenario would find a patient in a medical crisis and perhaps hospitalized.

If not in the hospital, the individual might be under-performing at work or not on the job at all, so-called "presenteeism" and absenteeism. In the mentally ill, lack of appropriate care can trigger a downward spiral that ends in homelessness or incarceration.

Unsafe policies

Most attempts to improve patient care and safety focus on reducing medical errors by clinicians. It is equally important, however, to focus on unsafe policies, procedures and regulations that contribute to patient harm. Scrutinizing formulary restrictions is a good first step.

Formulary boards, including physician executives who serve on P & T committees, must ensure that their decisions do not undermine patient care and that their policies are administered with integrity by pharmacy benefits managers (PBMs).

The American Psychiatric Association and its Committee on Managed Care have developed questions aimed at uncovering best and worst practices among PBMs. (7) The questions focus on:

** The criteria PBMs use to determine formularies

** The way exceptions to the formulary are handled

** Methodology for detecting drug/drug interactions and disease/drug interactions, as well as the system for notifying physicians of these interactions

** How PBMs educate patients, ensure adherence to medications, and obtain feedback from patients regarding satisfaction

It is expected that answers will guide physician executives and health care administrators in their formulary decisions.