Tuesday, January 28, 2014

Closed Formularies Control Drug Utilization

In July of 2012 we took a look at the early results of the prescription drug formulary in Ohio and in 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% - a number matched by a cost reduction of over 81%.  Legacy Claims posted similar results with a 23 % reduction in prescriptions and a 21% reduction in cost. (TDI, Workers’ Compensation Research and Evaluation Group, 2013.)

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.

On Twitter @PRIUM1

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