Exclusion Formulary Results in Pharmacy Savings

What is an Exclusion Formulary?

An exclusion formulary places certain medications within a drug class that have clinically supported alternatives in a noncoverage status in an effort to address escalating drug expenditures. On January 1, 2017, four BlueCross BlueShield (BCBS) plans implemented an exclusion formulary consisting of more than 300 excluded drugs. However, there are concerns that this method leads to increased medical resource utilization and costs.

In a study, researchers found that exclusion formularies resulted in significant pharmacy savings and were not associated with increased medical cost or resource utilization. The results of the study were presented at the AMCP Annual Meeting during a poster session titled “Exclusion Formulary: Assessment of Medical Costs, Pharmacy Costs, and Resource Utilization Compared to a Concurrent Control Group.”

The retrospective cohort study used administrative medical and pharmacy claims. The study included a control group of BCBS members who did not have an exclusion formulary. Included members were required to be continuously enrolled in a fully-insured line of business from January 2016 to December 2017.

Researchers assessed medical and pharmacy costs (defined as annual plan and member expenditures) and medical resource utilization (defined as annual member hospitalizations and emergency room [ER] visits). Researchers conducted a pre- (2016) and post- (2017) difference-in-difference analysis to assess any changes in cost and resource utilization.

To address cost of care, the researchers used a general estimating equation fit with a gamma distribution adjusting for BCBS plan, Charlson Comorbidity Index score, rural-urban setting, age, sex, and zip code–derived sociodemographic variables.

The final cohort included 116,300 members with an exclusion formulary and 750,446 members without.

During the study period, the exclusion formulary population had significantly lower pharmacy costs (0.2% vs 5.4%; P<0.01) and no increase in medical costs (11.9% vs 12.7%, P=0.69) compared with the control cohort. Incident rate ratios indicated nonsignificant differences for hospitalizations (1.10 vs 1.07; P=0.32) and ER visits (1.03 vs 1.02; P=0.52) between groups.

The researchers noted that for three conditions, exclusion formulary resulted in lower pharmacy costs without a significant difference to medical costs or utilization.

Further research is needed to evaluate the health care impact of these formularies, according to the authors.