Closed Formularies Control Drug Utilization
Thursday, February 13, 2014 | 0
In July 2012, we took a look at the early results of the prescription drug formulary in Ohio and Texas. Both were showing signs of favorable results.
Where do we sit 18 months later? In a word, progress.
The Ohio Bureau of Workers' Compensation has recently reported a reduction in prescription drug costs by $22.2 million (16%) since the formulary went into effect. Included in that curtailment is an 18.1% reduction in narcotic prescriptions and a 36.4% reduction in skeletal muscle relaxants for the first half of 2013, as compared to the first half of 2012. (BWC Annual Report)
Texas has seen even greater results between its two categories of claims. For injured workers with dates of injury after September 2011, prescription rates of drugs not recommended by the Texas closed formulary dropped 56%
While the closed formularies are clearly having a meaningful impact on prescription drug costs in these states, the approaches differ quite drastically. Ohio, a monopolistic work comp state, has implemented a closed formulary that it developed on its own. Texas is relying on its well-established utilization-review process and a third-party set of guidelines (ODG’s N drugs) for its implementation of a closed formulary. Take-away: there are different ways of implementing the concept that have been proven to work.
Closed formularies aren’t implemented over night. If other states want to start making meaningful impacts to their prescription drug costs at any point in the near future, decision makers had better have some big plans for their upcoming legislative sessions.
Michael Gavin is president of Prium, a medical cost-containment services provider. This column was reprinted with his permission from his Evidence Based blog.
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