Formularies Don't Have to Equal Dissatisfaction: A Balanced Approach is the Solution

According to a recent study in the Journal of the American Medical Association, prescription drug prices increased 3.5 times faster than the rate of inflation over the 11-year period between 2007 and 2018, even with taking rebates and discounts into account.[1] There are continual new drugs in the pipeline and television ads that lure viewers into requesting prescriptions that may not be the best or most economical option. With this, plan sponsors are always looking for ways to manage drug spend. Formularies have long been a primary tool used for controlling rising medication costs; however, the idea of putting restrictions on their members’ ability to access prescriptions gives some plan sponsors pause.

With the right mix that considers clinical effectiveness, economic impact and the member experience, formularies can be a valuable solution for managing drug spend while still getting members the right medication for their condition. Elixir uses this balanced and thoughtful approach to craft formulary solutions for our clients.

Clinical Effectiveness is Paramount

Elixir continuously monitors the drug pipeline, evaluating changes to treatment options to ensure our formularies are up to date and that any exclusions offer clinically sound alternatives. We won’t exclude a drug simply because of the price. We understand that in some cases, the clinical benefits outweigh costs. As an example, people with diabetes are two to four times more likely to suffer a heart attack or stroke than people without diabetes.[2] There are diabetes medications available that have proven cardiovascular benefits that, although more costly than other options, are a clinically effective and economic choice because the price of the medication is still substantially less than the healthcare costs associated with a cardiovascular event (CVE).

diabetes med cost vs cardiovascular cost_scale graphic_v6

The Bottom Line: Economic Impact

The ultimate goal of formularies is to control costs and we strive to ensure maximum savings, while simultaneously improving health outcomes. When evaluating drugs for our formularies, we consider all of the health economic factors. We then leverage our market position to get the best possible price. Taking into account the clinical value, scientific studies and health economic factors, we thoughtfully narrow drug options to develop a comprehensive formulary.

Keeping Members as the Main Focus

While a formulary is a valuable tool for managing drug spend, plan sponsors worry about the disruption caused to members medications are excluded. Elixir always takes the member experience into account when developing formularies.

Our Proven Process

Elixir has established a thorough review process to ensure we offer balanced formulary solutions. First, our Clinical Review committee analyzes the safety and effectiveness of pharmaceutical products and presents drug information and suggested clinical management strategies to our Pharmacy & Therapeutics (P&T) committee, comprised of independent, external clinicians representing a variety of specialties. The P&T committee meets quarterly to review medications and propose formulary updates, utilizing the information from the Clinical Review committee. The P&T committee’s recommendations are then reviewed by our Value Review committee, which balances the economic impact and member experience to make final formulary decisions.

The Right Mix for Controlling Costs and Caring for Members

To ensure the effectiveness of our formularies, Elixir continuously monitors plan performance. By balancing clinical effectiveness, economic impact and the member experience, our formularies provide a valuable solution for managing drug spend that limits disruption to members, ensuring they get the right medication for their condition at the right cost.

[1] Hernandez, I., et al (2020). Changes in List Prices, Net Prices, and Discounts for Branded Drugs in the US, 2007-2018. Journal of the American Medical Association. 2020;323(9):854-861. Doi:10.1001/jama.2020.1012.

[2] American Heart Association. Cardiovascular Disease and Diabetes.\\_krJpg.