| The rapid growth of pharmaceutical expenditure has prompted payers to adopt various cost-containment mechanisms, including incentive-based formularies. Beginning in January 2000, Tufts Health Plan implemented a change in outpatient prescription drug benefit change from a 2-tier (generic/brand) to a 3-tier (generic/preferred brand/non-preferred brand) formulary structure with increases in copayments. This quasi-experimental research used a pre-post control design to study the utilization patterns of prescription drugs and medical services among enrollees who were prescribed cardiovascular medications before and after the benefit change. Theoretical frameworks included both economic theories of demand and the Andersen and Newman model of health services utilization. Data from 1999 to 2001 included enrollment data, provider information, drug, medical and inpatient claims. Time trend analysis and difference-indifference techniques were used to ascertain the impact of the 3-tier program. A total of 6,477 people were included in the analysis. Difference-in-difference analysis found that among patients with prescriptions for an ever non-preferred drug, there was a significant decrease in NP drug use, but an increase in generic use. Mail order use also increased in the intervention group. The 3-tier implementation led to higher patient out-of-pocket (OOP) spending but reduced health plan spending by 17% for cardiovascular drugs. Both the control and intervention cohorts had more drug switching and discontinuation in the post-period, but this phenomenon was not attributable to the 3-tier implementation. In general, switchers and discontinuers were more likely to have physician visits for any reason, but hospitalizations were unaffected. Overall, there were increases in patient outof-pocket costs, but spending by the health plan did not increase or decrease significantly. In general, demand for cardiovascular drugs among this under 65 population was somewhat price-inelastic. This study gave evidence to how a plan could contain costs by shifting some of the burden onto the consumer, while not limiting access or adversely affecting patient outcomes. |
