Changes to the Formulary and Exclusion of Prescription Drugs
People can receive coverage for their prescriptions when their health insurance companies’ formulary has them. However, the formulary could add or remove some of them anytime (Glover 2016). While these changes may not affect some people, they may inconvenience others.
Insurance companies change their formularies for a variety of reasons. They rely on a pharmacy and therapeutics (P&T) committee, which consists of doctors, nurses, and other clinical experts and is separate from the insurance company, to “[develop, manage and update] the formulary…” (Glover 2016). The committee considers factors, such as “new drugs, safety data, FDA-approved prescribing information, clinical trial results and doctors’ recommendations[,] in order to keep the formulary up to date” (Glover 2016). Then, the health insurance company or the pharmacy benefits manager (PBM), “which is a third-party company that operates the formulary” and hired by health insurance companies “to negotiate discounts with the pharmaceutical companies,” determines the prices of the drugs (Glover 2016; Leefeldt 2017). PBMs, such as Express Scripts (ESRX) and CVS Health (CVS), can also take off or keep drugs on their formularies based on their effectiveness to treat people’s conditions (Leefeldt 2017). When CVS removed drugs from their formularies, Greg Lopes, spokesperson of the Pharmaceutical Care Management Association (PCMA), “which represents the PBM industry,” states “that as a result of those evaluations, ‘we typically reduce drug costs by 30 percent’” (Leefeldt 2017).
However, removing certain drugs may affect some patients’ treatment plan. Shoen Consulting surveyed 1,500 people for the Doctor-Patient Rights Project (DPRP) and found that, “[in] 2017, one in four insured Americans were denied access to treatment for a chronic illness, 37 percent of whom were denied because of a formulary exclusion…” (Christ 2017). In response to these exclusions, patients could use “a generic version of [their] medication,” which may be cheaper than their original medication, or ask their doctor about other medications (“Formulary exclusions for 2018. Was your drug’s coverage dropped?” 2017). While Stacey Worthy of the DPRP agrees that excluding drugs could “‘help manage the skyrocketing cost of patient care,’” she states, “‘these [exclusion lists] can cause stable patients to lose access to their medications in the middle of treatment. They must be implemented carefully so as not to disrupt care’” (Leefeldt 2017). Particularly, the replacements for excluded drugs, such as cancer and diabetic drugs, may not work as well as the original for some patients (Leefeldt 2017). Consequently, they may “skip or cut treatment of their original drug,” but they may “end up in emergency rooms or hospitals and require even more care as their illnesses worsen, according to the DPRP. These cost-cutting measures by PBMs wind up costing patients — and in turn the nation’s health care system — more money” (Leefeldt 2017).
Formulary updates helps manage the costs of health care, but the changes could negatively impact patients’ health and treatment plans. If patients need a certain drug instead of another version, they can consider “less expensive, off-insurance purchasing options” or patient assistance programs (Cunningham 2018; Davis 2017).