Do drug formulary policies reflect evidence of value?

Do drug formulary policies reflect evidence of value?
Posted on February 1, 2010
Authors: Neumann PJ, Lin PJ, Greenberg D, Berger M, Teutsch S, Mansley E, Weinstein MC, Rosen AB
American Journal of Managed Care 2006 12(1): 30-36  PubmedID: 234782000000   ISSN/ISBN: 1088-0224
Objective: To investigate the extent to which preferred drug lists and tiered formularies reflect evidence of value, as measured in published cost-utility analyses (CUAs). Methods: Using 1998-2001 data from a large registry of cost-effectiveness analyses, we examined the 2004 Florida Medicaid preferred drug list and the 2004 Harvard Pilgrim Pharmacy Program 3-tier formulary, and compared cost-utility ratios (standardized to 2002 US dollars) of drugs with preferred and nonpreferred status. Results: Few drugs on the formularies had any cost-utility data available. Of those that did, median cost-utility ratios were somewhat higher (less favorable) for Florida's preferred drugs compared with the nonpreferred drugs ($25 465 vs $13 085; P = .09). Ratios did not differ for drugs on tiers 1 and 2 of the Harvard Pilgrim formulary, although they were higher for tier 3 and for excluded drugs ($18 309, $18 846, $52 119, and $22 580, respectively; P = .01). Among therapies reported to be cost-saving or to have cost-utility ratios below $50 000, 77% had favored status in Florida Medicaid and 73% in Harvard Pilgrim. Among dominated drug interventions (reported to be More costly and less effective than alternatives), 95% had favored status in Florida Medicaid and 56% in Harvard Pilgrim. Conclusions: This study underscores the paucity of published cost-utility data available to formulary committees. Some discrepancies prevail between the value of drugs, as reflected in published cost-utility ratios, and the formulary placement policies of 2 large health plans.