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. 2015 Apr;21(4):269-75.
doi: 10.18553/jmcp.2015.21.4.269.

Design, implementation, and first-year outcomes of a value-based drug formulary

Sean D Sullivan  1 , Kai Yeung, Carol Vogeler, Scott D Ramsey, Edward Wong, Chad O Murphy, Dan Danielson, David L Veenstra, Louis P Garrison, Wylie Burke, John B Watkins
Affiliations

Design, implementation, and first-year outcomes of a value-based drug formulary

Sean D Sullivan et al. J Manag Care Spec Pharm. 2015 Apr.

Abstract

Background: Value-based insurance design attempts to align drug copayment tier with value rather than cost. Previous implementations of value-based insurance design have lowered copayments for drugs indicated for select "high value" conditions and have found modest improvements in medication adherence. However, these implementations have generally not resulted in cost savings to the health plan, suggesting a need for increased copayments for "low value" drugs. Further, previous implementations have assigned equal copayment reductions to all drugs within a therapeutic area without assessing the value of individual drugs. Aligning the individual drug's copayment to its specific value may yield greater clinical and economic benefits. In 2010, Premera Blue Cross, a large not-for-profit health plan in the Pacific Northwest, implemented a value-based drug formulary (VBF) that explicitly uses cost-effectiveness analyses after safety and efficacy reviews to estimate the value of each individual drug. Concurrently, Premera increased copayments for existing tiers.

Objective: To describe and evaluate the design, implementation, and first-year outcomes of the VBF.

Methods: We compared observed pharmacy cost per member per month in the year following the VBF implementation with 2 comparator groups: (1) observed pharmacy costs in the year prior to implementation, and (2) expected costs if no changes were made to the pharmacy benefits. Expected costs were generated by applying autoregressive integrated moving averages to pharmacy costs over the previous 36 months. We used an interrupted time series analysis to assess drug use and adherence among individuals with diabetes, hypertension, or dyslipidemia compared with a group of members in plans that did not implement a VBF.

Results: Pharmacy costs decreased by 3% compared with the 12 months prior and 11% compared with expected costs. There was no significant decline in medication use or adherence to treatments for patients with diabetes, hypertension, or dyslipidemia.

Conclusions: The VBF and copayment changes enabled pharmacy plan cost savings without negatively affecting utilization in key disease states.

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Conflict of interest statement

No external or internal funds were used to support this research. Yeung was funded through the University of Washington NIH/CTSA TL1 Scholars program. Sullivan, Burke, Garrison, and Veenstra are paid members of the Premara Blue Cross Value-Assessment Committee. Burke receives grant funding from the National Institutes of Health for pharmacogenetic research. Veenstra is a consultant for Genetech, Jazz Pharmaceuticals, National Pharmaceutical Council, and Abbott Dx.

Study concept and design were contributed by Sullivan, Yeung, Garrison, and Watkins, assisted by the other authors. Data were collected by Sullivan, Yeung, and Wong, assisted by the other authors, and analyzed by Sullivan, Murphy, and Veenstra, with assistance from the other authors. The manuscript was written primarily by Sullivan, Yeung, and Vogeler, with assistance from the other authors, and revised by Sullivan, Yeung, and Ramsey, assisted by the other authors.

Figures

FIGURE 1
FIGURE 1
Projected and Actual Costs Per Member Per Month
See this image and copyright information in PMC

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