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Designing Pharmacy Benefits to Improve Quality and Contain Costs

Stephen Soumerai, Sc.D . Professor Department of Ambulatory Care and Prevention Harvard Medical School and Harvard Pilgrim Health Care. Designing Pharmacy Benefits to Improve Quality and Contain Costs. Evolution of Prescription Drug Benefits Designs .

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Designing Pharmacy Benefits to Improve Quality and Contain Costs

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  1. Stephen Soumerai, Sc.D.ProfessorDepartment of Ambulatory Care and PreventionHarvard Medical School and Harvard Pilgrim Health Care Designing Pharmacy Benefits to Improve Quality and Contain Costs

  2. Evolution of Prescription Drug Benefits Designs • Non-selective “blunt” tools can have unintended consequences, reduce clinical effectiveness, and increase total costs • Caps on number of prescriptions • Non-selective cost sharing • Triplicate prescriptions

  3. Evolution of Prescription Drug Benefits Designs (cont’d) • Initial studies suggest that selective “sharp” tools that recognize relative effectiveness of drugs within a class can reduce inappropriate use and promote least-costly alternatives • Reference pricing • Tiered copayments • Evidence-based preferred drug lists and formularies

  4. Unintended effects of non-selective cost-sharing policies • Reduces use of clinically important medicines (e.g., insulin, cardiac meds) • Increases use of institutional services • Nursing homes and hospitals (elderly) • Day hospital and acute care (patients with schizophrenia.) • May increase total health care costs • Mental health cost offsets 17 x drug savings

  5. Time Series of Constant-Size Rxs per Continuously Eligible Patient per Month among Multiple Drug Recipients (N=860) and Other Outpatients (N=8002) Source: Soumerai et al, N Engl J Med 1987; 317: 550-6

  6. DOSES REDUCED DOSES MAINTAINED Cap-induced Changes in Essential Drugs: “Droppers” vs. “Maintainers” 4 3 STANDARD DOSES PER ELIGIBLE PERSON 2 1 BASELINE 3 DRUG CAP $1 COPAY 0 JUL ‘80 JUL ‘81 JUL ‘82 Source: Soumerai et al, N Engl J Med 1994; 331: 650-5

  7. Effects of Prescription Cap on Nursing Home Admissions 100% 95% New Jersey % outside nursing home 90% New Hampshire 85% Baseline Cap After Cap 80% Source: Soumerai et al, N Engl J Med 1991; 325: 1072-7

  8. Effect of Cap on Emergency Mental Health Services Baseline Cap After Cap Source: Soumerai et al, N Engl J Med 1994; 331: 650-5

  9. Changes in Use of Essential Drugs With Change in Cost Sharing Source: Tamblyn R et al, JAMA 2001; 285: 421-429

  10. Effect of a $0.50 per Rx Copayment on Medication Use by Medicaid Recipients in South Carolina Source: Nelson, Reeder & Dickson. Med Care Aug. 1984 p. 724

  11. Triplicate Policy Impact of Triplicate Prescription Program (TPP) on Benzodiazepine (BZ) Prescribing New Jersey New York (-54.8%) Source: Ross-Degnan et al (submitted)

  12. Triplicate Policy New Jersey New York Impact of TPP on Use of BZ Indicated for Seizure and Panic Disorder Source: Ross-Degnan et al (submitted)

  13. Reduction in BZ Use Among Patients with Seizure Disorder NJ Control Cohort NY Study Cohort Source: Simoni-Wastila et al (submitted)

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