Managed care organizations and insurance plans are increasingly adopting step therapy in an effort to contain costs by steering patients away from more costly pharmacotherapies. Step therapy requires a member to try the first-line medication(s) within a drug class, often a generic alternative, prior to receiving coverage for a second-line agent, usually a branded product.¹ Currently, most pharmacy benefit managers implement step therapy using “smart edit” logic and grandfathering those members who had obtained a prescription for the target (second-line) drug in the recent past. At the point of service, the smart edit reviews the member’s claims history (both electronically and in real time) for evidence of prior use of the first-line agent(s). If a claim is found, the system covers the second-line agent; otherwise, the claim is rejected. After claim rejection, members have the opportunity to have their prescriber change the prescription to the first-line agent or to submit a request for coverage of the secondline agent through a prior authorization.¹

There is a small but growing literature on step-therapy programs. In 2007 Yokoyama and colleagues evaluated hypertension-related pharmacy use and costs for 3 managed care plans that implemented an angiotensin receptor blocker (ARB) step-therapy intervention compared with 1 health plan with no ARB step-therapy intervention.² The step-therapy intervention used a smart edit of patient pharmacy claim history in the preceding 3-month period. The ARB claim was rejected if there was no prior use of these drugs, in which case the pharmacist or patient had to contact the prescriber to obtain an alternative to the ARB or a prior authorization. The researchers found that within 12 months of follow-up, a step-therapy intervention for ARBs was associated with an 18% ratio of ARB users to the total number of patients using angiotensin-converting enzyme (ACE) inhibitors or ARBs compared with a 31% ratio in a health plan without the ARB step-therapy intervention. Of the patients who attempted to obtain an ARB and were rejected in the step-therapy group, 44.6% of patients went through the prior authorization process and received an ARB as initial therapy, 48.8% received other antihypertensive therapy, and 6.6% did not receive any antihypertensive therapy. Antihypertensive drug costs were about 13% lower for the ACE/ARB patients in the intervention group.

Motheral and colleagues examined the effect of prescription step-therapy programs in terms of plan-sponsor savings and member experience at the point of service.^3,4 Specifically, they studied a 20,000-member plan that implemented 3 step-therapy programs in September 2002. The step-therapy programs covered proton pump inhibitors, selective serotonin reuptake inhibitors, and nonsteroidal anti-inflammatory drugs. Pharmacy claims from September 1, 2001, through June 30, 2003, were examined to compare changes in pharmacy per-member per-month (PMPM) net cost for the intervention group with changes in pharmacy PMPM net cost for a random sample of members from commercial plans without the step-therapy programs. A mailed, self-administered survey was sent to members with a step edit from September 1, 2002, through December 31, 2002. They found that the employer experienced a decrease of $0.83 PMPM in net cost after implementing step therapy, while the comparison group had an increase of $0.10 PMPM for these therapy classes.

Of the approximately 657 members who experienced a step-therapy edit and were mailed a survey, 33% returned the survey. Member-reported outcomes indicated that approximately 30% of patients received a generic after the step-therapy edit, 23% were granted a medical exception for the brand, and another 16% paid out-of-pocket for the brand medication. Nearly 17% received no medication, and another 10% received a sample or a nonprescription alternative. Compared with those who received first-line therapy, those who paid out-of-pocket for the brand medication and those who did not receive any medication were less likely to be satisfied with their pharmacy benefit.⁴

Dunn and colleagues evaluated the impact on utilization and costs of a generic step-therapy program for antidepressant drugs in a health maintenance organization.⁵ In the program, brand-name antidepressants were covered only after a trial with a generic antidepressant, excluding tricyclic antidepressants. The authors found that the generic antidepressant dispensing rate increased by 20 percentage points (32.5%-52.5%) in the intervention group but only 7.4 points in the comparison group (24.9%-32.3%). Antidepressant costs per day of therapy in the intervention group decreased 11.7% versus a 2.7% decrease in the comparison group. The combination of change in drug costs and utilization resulted in a 13% decrease in antidepressant drug costs, from $4.16 PMPM in 2004 to $3.62 PMPM in 2005, versus a 7.6% decrease (from $3.57 to $3.30 PMPM) in the comparison group.

While prior research examined the effects of step therapy on prescription drug utilization and spending, this study focused on the effects of step therapy on all types of medical care utilization and spending. Specifically, the goal of this study was to examine the impact of a step-therapy program for ACE/ARBs on prescription drug and medical utilization and spending. Our estimates of the effects of step therapy are based on 2 ACE/ARB step-therapy programs implemented at different points in time, not a single program implementation. This strengthens the study design, providing an estimate of the common effects of step-therapy programs on utilization and spending.

METHODS

The data source is the MarketScan Research Database from Thomson Reuters, representing the healthcare experience of enrollees in employer-sponsored health plans in the United States. Although the MarketScan Database in its entirety represents the healthcare experiences of more than 60 employers, we selected employers who had either (1) recently implemented step therapy (as a treatment group) or (2) could be verified as not having a step-therapy program in place (as a comparison group). Two firms had recently implemented steptherapy programs and were selected as the treatment group. As an additional requirement, the step-therapy program had to be implemented equally across all benefit plans available to an enrollee. To reduce the likelihood of selection bias, step therapy could not be selected or deselected by the individual enrollee. Two employers that did not have a step-therapy program in effect during the same time served as a control group.

The step-therapy programs identified were implemented at different times, from 2003 through 2005, depending on the particular employer and prescription drug class. Exact dates of implementation are not disclosed to protect the identities of the employers.