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The Impact of Formulary Drug Exclusion Policies on Patients and Healthcare Costs
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The Impact of Formulary Drug Exclusion Policies on Patients and Healthcare Costs

James D. Chambers, PhD; Pallavi B. Rane, PhD; and Peter J. Neumann, ScD
The authors review empirical evaluations of drug exclusion policies to examine their impact on patients and on healthcare costs.
Impact of Drug Exclusion Policies on Patients
Twenty studies reported the impact of 21 drug exclusion policies on patients. The studies reported the impact of the drug exclusion policies on a total of 44 study end points, of which 7 were positive, 8 were negative, and 29 were neutral. The net impact of the drug exclusion policies on patients varied. Six (28.6%) drug exclusion policies were reported to have a positive net impact on patients, 6 (28.6%) were reported to have a negative net impact on patients, and 9 (42.8%) were found to have a neutral net impact on patients (Table 2).
 
The 6 drug exclusion policies that were reported to have positively impacted patients were found to improve disease control: 3 studies found that policies for hypertension treatments reduced patients’ blood pressure; 2 found that policies for hyperlipidemia treatments increased high-density lipoprotein cholesterol levels, while other lipid levels remained unchanged; and 1 found that a policy for glaucoma treatment reduced mean intraocular pressure (Table 2).
 
The drug exclusion policies that were reported to have negatively impacted patients did so in a variety of ways: 1 found that a policy for diabetes treatments negatively affected disease control by increasing glycated hemoglobin (A1C) levels, 1 reported that a policy for psychotic disorder treatments increased the incidence of acute care events, 2 found that policies for GERD treatments increased the frequency and severity of symptoms, and 2 studies—1 examining a policy for GERD treatments and 1 examining a policy for hypertension treatments—found an increase in the frequency of side effects (Table 2).
 
Impact of Drug Exclusion Policies on Healthcare Costs

Eighteen studies reported the impact of 19 drug exclusion policies on healthcare costs: 14 (73.7%) drug exclusion policies were reported to have reduced overall healthcare costs, 1 (5.3%) was reported to have had a neutral impact on overall healthcare costs, and 4 (21.1%) were reported to have increased overall healthcare costs (Table 3).
 
The drug exclusion policies that were found to increase overall healthcare costs typically did so because the reduction in drug expenditures was exceeded by the costs associated with increases in healthcare services elsewhere in the system (Table 3). In one example, Alemayehu et al evaluated the impact of a large commercial payer excluding esomeprazole from its drug formulary, meaning that patients suffering from GERD were required to switch to a less expensive proton pump inhibitor (PPI).5 The study found that compared with the 6 months before implementation of the drug exclusion policy, there was a 4.2% increase in the number of inpatient admissions and a 2.3% increase in the use of other services, including laboratory testing and ambulatory procedures in the following 6 months. The study also found that although switching to a cheaper PPI reduced 6-month prescription drug costs by $177 per patient (P <.01), costs associated with other medical services increased by $450 per patient (P <.01), resulting in a net increase of $273 per patient.
 
In another study that examined a drug exclusion policy affecting patients with GERD, Skinner et al used a claims database to evaluate the impact of the PharmaCare program in British Columbia’s policy that mandated that patients treated with a PPI switch from their current therapy to the least expensive PPI, which, at the time of the study, was rabeprazole.29 The study found that because of greater use of PPIs, PPI drug expenditures increased by 9.1 million Canadian dollars (C$) (P <.01) following the drug exclusion policy. The study also found that the drug exclusion policy led to the cost of physician services increasing by C$24.7 million (P <.01) and the cost of hospital services increasing by C$9.8 million (P <.01).
 
Comparison of Studied Conditions
The included studies evaluated drug exclusion policies for 7 conditions. Five conditions were featured multiple times: GERD and related disorders (8 studies), hypertension (7), hyperlipidemia (5), diabetes (3), and glaucoma (2). Allergic rhinitis and psychotic disorders were featured in a single study.
 
Study findings varied among the 8 studies that evaluated drug exclusion policies for GERD treatments. Three of the 4 studies that reported the impact of the policy on patients found it to be negative, and 3 of the 7 studies that reported the impact of the policy on overall healthcare costs found that the reduction in drug expenditures was either offset or exceeded by costs incurred elsewhere in the health system.
 
Each of the 7 studies that evaluated drug exclusion policies for hypertension treatments reported the impact of the policy on patients, and only 1 found it to be negative; each of the 4 studies that reported the impact of the policy on overall healthcare costs reported that costs were reduced.
 
Each of the 4 studies that evaluated drug exclusion policies for hyperlipidemia treatments reported the impact of the drug exclusion policy on patients and found that patients were not adversely impacted; 1 of the 4 studies that reported the impact of the policy on overall healthcare costs reported that costs increased.
 
Each of the 3 studies that evaluated drug exclusion policies for diabetes treatments reported the impact of the drug exclusion policy on patients, and 1 found it to be negative; the 1 study that reported the impact of the policy on healthcare costs reported that costs were reduced.
 
Both of the studies that evaluated drug exclusion policies for glaucoma treatments reported the impact of the drug exclusion policy on patients and found that patients were not adversely impacted; the 1 study that reported the impact of the policy on overall healthcare costs reported that costs were reduced.
 
The study that evaluated a drug exclusion policy for psychotic disorders (ie, schizophrenia or schizoaffective, bipolar, or other psychotic disorders) reported a negative impact on patients, but that the policy had no impact on overall healthcare costs. The study that evaluated a drug exclusion policy for allergic rhinitis treatments did not report the impact of the drug exclusion policy on patients, but it did report that the policy reduced overall healthcare costs.
 


 
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