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The American Journal of Managed Care June 2018
Prevalence and Predictors of Hypoglycemia in South Korea
Sun-Young Park, PhD; Eun Jin Jang, PhD; Ju-Young Shin, PhD; Min-Young Lee, PhD; Donguk Kim, PhD; and Eui-Kyung Lee, PhD
Initial Results of a Lung Cancer Screening Demonstration Project: A Local Program Evaluation
Angela E. Fabbrini, MPH; Sarah E. Lillie, PhD, MPH; Melissa R. Partin, PhD; Steven S. Fu, MD, MSCE; Barbara A. Clothier, MS, MA; Ann K. Bangerter, BS; David B. Nelson, PhD; Elizabeth A. Doro, BS; Brian J. Bell, MD; and Kathryn L. Rice, MD
A Longitudinal Examination of the Asthma Medication Ratio in Children
Annie Lintzenich Andrews, MD, MSCR; Daniel Brinton, MHA, MAR; Kit N. Simpson, DrPH; and Annie N. Simpson, PhD
Physician Practice Variation Under Orthopedic Bundled Payment
Joshua M. Liao, MD, MSc; Ezekiel J. Emanuel, MD, PhD; Gary L. Whittington, BSBA; Dylan S. Small, PhD; Andrea B. Troxel, ScD; Jingsan Zhu, MS, MBA; Wenjun Zhong, PhD; and Amol S. Navathe, MD, PhD
Simply Delivered Meals: A Tale of Collaboration
Sarah L. Martin, PhD; Nancy Connelly, MBA; Cassandra Parsons, PharmD; and Katlyn Blackstone, MS, LSW
Currently Reading
Placement of Selected New FDA-Approved Drugs in Medicare Part D Formularies, 2009-2013
Bruce C. Stuart, PhD; Sarah E. Tom, PhD; Michelle Choi, PharmD; Abree Johnson, MS; Kai Sun, MS; Danya Qato, PhD; Engels N. Obi, PhD; Christopher Zacker, PhD; Yujin Park, PharmD; and Steve Arcona, PhD
Assessing Markers From Ambulatory Laboratory Tests for Predicting High-Risk Patients
Klaus W. Lemke, PhD; Kimberly A. Gudzune, MD, MPH; Hadi Kharrazi, MD, PhD, MHI; and Jonathan P. Weiner, DrPH
Satisfaction With Care After Reducing Opioids for Chronic Pain
Adam L. Sharp, MD, MS; Ernest Shen, PhD; Yi-Lin Wu, MS; Adeline Wong, MPH; Michael Menchine, MD, MS; Michael H. Kanter, MD; and Michael K. Gould, MD, MS
Cost Sharing for Antiepileptic Drugs: Medication Utilization and Health Plan Costs
Nina R. Joyce, PhD; Jesse Fishman, PharmD; Sarah Green, BA; David M. Labiner, MD; Imane Wild, PhD, MBA; and David C. Grabowski, PhD

Placement of Selected New FDA-Approved Drugs in Medicare Part D Formularies, 2009-2013

Bruce C. Stuart, PhD; Sarah E. Tom, PhD; Michelle Choi, PharmD; Abree Johnson, MS; Kai Sun, MS; Danya Qato, PhD; Engels N. Obi, PhD; Christopher Zacker, PhD; Yujin Park, PharmD; and Steve Arcona, PhD
There is significant heterogeneity in formulary placement and restrictions on new drug approvals in the Part D marketplace.

Objectives: To assess formulary decisions by Part D plans for selected newly approved drugs.

Study Design: Retrospective cohort study.

Methods: Formulary placement and restrictions were identified for 33 drugs in 8 therapeutic classes (antihyperglycemics, anticoagulants, antiplatelets, disease-modifying agents for multiple sclerosis [MS] and rheumatoid arthritis [RA], chronic obstructive pulmonary disease [COPD] drugs, antiepileptics, and antipsychotics) in 863 Part D plans with continuous CMS contracts between 2009 and 2013. Multivariable models estimated the impact of drug characteristics and Part D plan characteristics on probability of drug adoption and, for adopters, evaluated factors associated with months to adoption and requirements for prior authorization (PA) or step therapy (ST).

Results: First Part D formulary placements varied from 2 to 14 months post FDA approval. On average, 56.7% of plans placed each drug within 6 months and 64.1% placed within 1 year of the National Drug Code assignment date. The most rapid adoption was for antipsychotics and antiepileptics. The slowest was for COPD drugs. More than 90% of disease-modifying agents for MS and RA were subject to PA. ST was uncommon except for antihyperglycemic agents. In adjusted analyses, enhanced benefit plans had a 4% higher probability of formulary placement (P <.01), and each additional star in the CMS star rating system increased the probability of adoption by 4% (P <.01). Overall, Medicare Advantage prescription drug plans had higher placement rates due to greater reliance on enhanced plan offerings and higher star ratings.

Conclusions: We found significant heterogeneity in formulary placement and restrictions for 33 new drugs in the Part D marketplace between 2009 and 2013. Further research is necessary to determine whether this pattern applies to other drug classes.

Am J Manag Care. 2018;24(6):e175-e182
Takeaway Points

Medicare spending per fee-for-service beneficiary in 2008 varied from $6000 in Rapid City, South Dakota, to more than $18,000 in Miami, Florida. While some policy makers favor directly reducing payments in high-cost areas, the Institute of Medicine favors policies focused on provider inefficiency. We investigated whether several such policies would have the virtue of also reducing variation in spending. If inefficiency is concentrated in high-cost areas, then this may be the case.
  • There are concerns that retail clinics provide an inferior quality of care, but our results do not support these concerns.
  • No difference was found in quality of antibiotic prescribing among retail clinics, physician offices, and emergency departments.
The Medicare Part D program provides drug benefits to more than 37 million Medicare beneficiaries enrolled in about 2700 plans operated by more than 150 sponsors.1 Plan coverage is guided by CMS formulary provisions that generally require plans to offer at least 2 products in each therapeutic class. Exceptions are made for innovator classes with just a single product and the so-called “protected classes” (immunosuppressants used for organ transplant rejection prophylaxis, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and antineoplastics) in which essentially all drugs must be covered. These exceptions notwithstanding, CMS-mandated therapeutic classes are broadly defined, giving plan sponsors considerable latitude in selecting products for formulary placement. Moreover, plans can influence utilization for covered products through cost-sharing tier assignment and utilization management tools, including step therapy (ST) and prior authorization (PA). As a result, there is a high degree of heterogeneity in benefit designs across the Part D market,2,3 which makes it extremely difficult to assess whether (and which) plans consistently offer coverage for high-value medications.

The objective of this paper was to improve policy makers’ understanding of how quickly Part D sponsors add newly FDA-approved drugs to their formularies. We had 3 specific aims. The first was to track rates of formulary placement by Part D plans for each new drug selected for analysis for a minimum of 12 months following FDA approval. Our second aim was to identify policies that plans adopted upon formulary placement, including ST and PA. Our final aim was to assess how formulary adoption decisions were influenced by characteristics of the drugs, number of competing products, and Part D plan characteristics.

Our approach exploits a unique characteristic of the Part D market in which stand-alone prescription drug plans (PDPs) are at risk only for drug spending, while managed care Medicare Advantage prescription drug plans (MAPDs) are also at financial risk for Part A and B services. We expected these differences in risk exposure to influence the timing of formulary adoption and the application of PA and ST and, ultimately, to lead to reduced beneficiary access to newly approved therapies in PDPs relative to MAPDs. Moreover, because MAPD plans are permitted to use savings generated in the provision of Part A and B services to subsidize Part D coverage, we expected to observe higher formulary placements among MAPDs. Findings of 2 studies suggest that MAPDs and PDPs respond to different incentives when constructing their drug formularies,4,5 but no published studies have examined formulary adoption of newly approved drugs in the Part D marketplace.


Selection of Drugs for Review

We selected all new drugs approved by the FDA between January 2009 and December 2013 in 8 therapeutic classes and then tracked Part D formulary coverage for these drugs through December 2014. We included 2 classes with relatively few competing products—anticoagulants and antiplatelets—as well as 2 classes with many competing products—antihyperglycemics and medications used in treating chronic obstructive pulmonary disease (COPD). We also selected 2 classes dominated by new, expensive biologic agents—disease-modifying agents used in treating multiple sclerosis (MS) and rheumatoid arthritis (RA)—and 2 CMS protected classes—antiepileptic drugs and antipsychotics. In all, we evaluated 33 drugs among the 438 products approved by the FDA during this time period.6 Although the drug selection criteria were qualitative rather than quantitative, we believe this study will help spur additional research on the diffusion of new drug products within the Medicare marketplace.

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