Drug use and spending under a formulary informed by cost-effectiveness

Abstract

BACKGROUND: The National Academy of Medicine has called for value-based drug formularies to address health plan prescription drug spending while maintaining access to high-value medicines. Thirty employer-sponsored plans implemented a "Value-Based Formulary-essentials" (VBF-e) program that uses cost-effectiveness evidence to inform cost-sharing and coverage exclusion. OBJECTIVE: To evaluate if the VBF-e was associated with changes in medication use and patient out-of-pocket spending and health plan spending on prescription drugs and other health care. METHODS: This was a cohort study using a difference-in-differences design from 2015 through 2019 with 1 year of follow-up after VBF-e implementation at Premera Blue Cross, the largest nonprofit health plan in the Pacific Northwest. The VBF-e exposure group was composed of all individuals aged younger than 65 years and enrolled at least 12 months prior to their employer group's VBF-e implementation date. The contemporaneous control group was composed of propensity score-matched individuals with the same inclusion criteria but their employer group that did not implement VBF-e. We prespecified the following outcomes: days of medication on hand overall and by VBF-e tier (high-value generic, brand, and specialty drugs were in tiers 1 to 3, respectively, and low-value drugs were in tier 4 or excluded from coverage); prescription drug spending; and other health care use (emergency department visits, hospital days, and outpatient visits). RESULTS: Comparing 12,111 exposed (mean age = 36.0; 49.8% female sex) participants with 24,222 control participants (mean age = 34.7; 49.6% female sex), VBF-e reduced use of low-value drugs by 0.3 days per member per month (PMPM) (95% CI = -0.5 to -0.1; 17% decrease) for tier 4 drugs and 0.4 days PMPM (95% CI = -0.5 to -0.4; 83% decrease) for excluded drugs. High-value specialty drug use increased by 0.1 days PMPM (95% CI = 0.0-0.1; 123% increase). Health plan spending decreased by $14 PMPM (95% CI = -26 to -4) and member out-of-pocket spending increased by $1 PMPM (95% CI = 1-2). Other health care use did not change significantly. CONCLUSIONS: An exclusion formulary informed by cost-effectiveness evidence reduced low-value drug use, increased high-value specialty drug use, reduced health plan spending, and increased member out-of-pocket spending without increasing acute care use. DISCLOSURES: This research was supported by a grant from the Patrick and Catherine Weldon Donaghue Medical Research Foundation's Greater Value Portfolio Program. Study Registration Number: NCT04904055.

FIGURE 1

Observed and Modeled Total Drug Spending in the Exposure Group (With and Without VBF-e) and Control Group, 2 Years Before and 1 Year After VBF-e Enactment