Are PBMs Telling the Truth About Formulary Exclusion Lists?

A recent study found that formulary exclusion lists created by pharmacy benefit managers (PBMs) reduces costs and do not have a negative impact on patient outcomes.

Excluding drugs from formulary lists is a way that PBMs say they can lower rapidly increasing drug costs due to increased negotiation power that stems from the fear that they will cover a competing drug instead.

These companies are largely scrutinized for this practice, since critics say that it can affect patients who need a medication that is not covered. However, the study, which was published by the American Journal of Managed Care, finds that the PBM formulary exclusion lists do exactly what they claim to.

Researchers conducted a literature review to analyze the effects of drug exclusion policies on patients who need to change their treatment as a result of the list, and on costs. Patient outcomes were considered positive if the new medication improved a patient’s condition.

Outcomes were considered negative if a patient had increased frequency or severity of symptoms, or if they relapsed, according to the study. Healthcare costs relating to the policy, such as costs relating to drugs, physician visits, hospitalizations, laboratory tests, and more were measured.

Researchers included 27 drug exclusion policies and their respective effects in the study. There were 21 studies that focused on the impact on patients.

The researchers found that 28.6% of the studies had a positive impact on patients, and 28.6% reported a negative impact. The other 42.8% of studies reported a neutral impact.

The studies that reported a positive impact saw improved disease control for conditions such as hypertension, hyperlipidemia, and glaucoma. The studies that reported a negative impact saw diminished disease control for conditions such as diabetes, psychotic disorders, and GERD.

Negative impacts could be due to a less than optimal response to a new drug, since it may have a different safety, efficacy, or metabolic profile, according to the study. Researchers also stated that these policies could potentially lead to reduced adherence and problems with disease management.

There were 18 studies that reported the impact of 19 policies on costs, according to the study. Approximately 73.7% of the studies found a decrease in healthcare costs, while only 21.1% reported an increase. The other 5.3% reported a neutral impact.

Policies that increased costs was typically because the costs of increased healthcare services surpassed lower drug expenditures. An increase of laboratory testing, ambulatory procedures, physician services, and hospital admissions was seen due to formulary exclusions.

PBMs are faced with new technology and rising drug costs, and respond by removing drugs from their formulary when a less effective alternative is available, according to the study. While these policies have largely had a positive or neutral impact on patients and costs, negative impacts have also been seen, therefore PBMs should be cautious about what they continue to cover, and what they exclude.

Decision makers must be mindful of the consequences of their policies, and can conduct formal cost-effectiveness analyses and budget impact models to account for anything problematic that may arise, the study concluded.