Modeling the Effects of Formulary Exclusions: How Many Patients Could Be Affected by a Specific Exclusion?

Abstract

Background: Medication formularies, initially designed to promote the use of cost-effective generic drugs, are now designed to maximize financial benefits for the pharmacy benefit management companies that negotiate purchase prices. In the second-largest pharmacy benefit management formulary that is publicly available, 55% of mandated substitutions are not for generic or biosimilar versions of the same active ingredient and/or formulation and may not be medically or financially beneficial to patients. Methods: We modeled the effect of excluding novel agents for atrial fibrillation/venous thromboembolism, migraine prevention, and psoriasis, which all would require substitution with a different active ingredient. Using population data, market share of the 2 largest US formularies, and 2021 prescription data, we calculated how many people could be affected by such exclusions. Using data from the published literature, we calculated how many of those individuals are likely to discontinue treatment and/or have adverse events due to a formulary exclusion. Results: The number of people likely to have adverse events due to the exclusion could be as high as 1 million for atrial fibrillation/venous thromboembolism, 900 000 for migraine prevention, and 500 000 for psoriasis. The numbers likely to discontinue treatment for their condition are as high as 924 000 for atrial fibrillation/venous thromboembolism, 646 000 for migraine, and 138 000 for psoriasis. Conclusion: Substitution with a nonequivalent treatment is common in formularies currently in use and is not without substantial consequences for hundreds of thousands of patients. Forced medication substitution results in costly increases in morbidity and mortality and should be part of the cost-benefit analysis of any formulary exclusion.

Could the Inflation Reduction Act Maximum Fair Price Hurt Patients?

“…Past research demonstrates the impact of formulary exclusions on patients. [19][20][21][22][23] The analysis presented here suggests shifting out-of-pocket costs onto patients, perhaps as a consequence of the IRA MFP, may have a similar detrimental effect. Policies that move patients to higher outof-pocket spending will not only strain seniors' finances but also force some to abandon treatments, leading to more severe health consequences, including increased mortality.…”

“…The practice of formulary exclusions and increasing out-of-pocket expenses by moving medications to a formulary tier that requires patients to pay more out of pocket can harm both patients' pocketbooks and health outcomes. 19,20 Such tactics by the PBMs have led to patients abandoning their treatments for nonmedical reasons (e.g., financial burdens), leading to adverse events and increased mortality and morbidity. [21][22][23] The number of patients impacted is not inconsequential.…”

“…Published studies have demonstrated that specific formulary exclusions and changes in out-of-pocket requirements impact hundreds of thousands of patients. [19][20][21][22][23] In addition, a study by IQVIA illustrates a linear correlation between the copay costs of medication and the proportion of patients who abandon it. 24…”