Transcript 2004_SCI_MedicarePartD_huskamp

Formularies and Cost Sharing
Issues for Medicare Part D
Haiden Huskamp, Ph.D.
October 8, 2004
Funding for research presented provided by the Robert Wood
Johnson Foundation’s HCFO program, NIMH and AHRQ
Three-Tier Formularies

Basic Structure:

Tier 1: generic drugs (e.g., $5)

Tier 2: preferred brand-name drugs (e.g., $15)

Tier 3: non-preferred brand-name drugs (e.g.,
$30)
Primary Goals


Make patients and their doctors more
sensitive to the relative costs of different
treatments
Increase bargaining power with
pharmaceutical manufacturers
Questions

Reduction in plan spending?

Increased costs for patients?

Clinical outcomes: change or stop
medications?
Formulary Changes

Employer A
Pre: $7
 Post: $8/$15/$30


Employer B
Pre: $6/$12
 Post: $6/$12/$24

Formulary Content
Drug Class
ACE
Inhibitors
PPIs
Statins
Tier 1
Tier 2
Tier 3
Accupril
Capoten
Lotensin
Prinivil
Aceon
Altace
Mavik
Monopril
Univasc
Vasotec
Zestril
None
Nexium (after 11/01)
Prilosec
Aciphex
Nexium (before 11/01)
Prevacid
Protonix
lovastatin
Baycol (after 10/00)
Lipitor
Pravachol
Zocor
Baycol (before 10/00)
Lescol
Mevacor
captopril
enalapril maleate
Study Population
EMPLOYER B
EMPLOYER A



Mostly hourly workers
3-Tier Group: 55,567
Comparison Group: 55,951



Mostly salaried workers
3-Tier Group: 11,653
Comparison Group: 27,051
Analyses

Models of how formulary changes affected:



Probability of use
Amount spent by plan, patient, and total
Stay, switch or stop medications
Large Copay Increase Slowed Growth
in ACE Use for Employer A
0.025
0.02
0.015
0.01
0.005
Month
31
28
25
22
19
16
13
10
7
4
0
1
# users / # enrollees
0.03
Comparison
Intervention
Limited Copay Increase Had No
Effect on ACE Use for Employer B
0.035
0.03
0.025
0.02
0.015
0.01
0.005
Month
31
28
25
22
19
16
13
10
7
4
0
1
# users / # enrollees
0.04
Comparison
Intervention
Large Cost-Shift for Employer A Only
Employer B
Employer A
ACE
Inhibitors
PPIs
Statins
Plan
Spending
58% 
15% 
14% 
Enrollee
Spending
142%  148%  118% 
ACE
Inhibitors
PPIs
Statins
Plan
Spending
5% 
2% 
0
(NS)
Enrollee
Spending
7% 
5% 
0
(NS)
Tier 3 Users More Likely to
Change to Lower Tier
Employer B
Employer A
49
50%
49
50%
41
42
40%
40%
35
30%
30%
20%
17
10%
20%
18
15
10%
8
4
2
1
0%
0%
ACE
Proton-Pump
Inhibitor
Intervention
Statin
Comparison
ACE
Proton-Pump
Inhibitor
Statin
Employer A Tier 3 Users More
Likely to Discontinue
Employer A
40%
32
30%
21
19
20%
16
11
10%
6
0%
ACE
Proton-Pump
Inhibitor
Intervention
Statin
Comparison
Research Conclusions

Substantial copay increases by A led to:

Slower growth in use

Shifting of costs onto patients


Greater likelihood of changing or discontinuing
medications
More moderate changes had more modest
effects
Important MMA Provisions



Category/class definition, tier assignment and
copayment levels important for access and
out-of-pocket burden
Formulary reconsideration process could
facilitate or impede access
Secretary’s role in monitoring plan design is
key
Formulary Structure and Content
Could Affect Access Under Part D
Category
Class
Recommended
Subdivision
Antidepressants
Reuptake
Inhibitors
MAOIs
SSRIs
SNRIs
Other
TCAs
Formulary Structure and Content
Could Affect Access Under Part D
Example A
Example B
Example C
Antidepressants
Antidepressants
Antidepressants
SSRIs
SSRIs
Reuptake Inhibitors
Tier 1($10)
generic Prozac
generic Paxil
generic Prozac
generic Paxil
TCAs
Tier 2 ($25)
Celexa
Zoloft
-----------
----------
Tier 3 ($50)
Lexapro
Celexa
----------
brand Prozac
brand Paxil
Zoloft
Lexapro
All SSRIs (e.g., Celexa)
All SNRIs
Category
Class
Nonformulary brand Prozac
brand Paxil