Pharmacy Savings Linked With Exclusion Formulary

In an effort to address escalating drug expenditures, formulary exclusions have arisen, and according to a recent study, the exclusion formulary has resulted in significant pharmacy savings but was not associated with increased medical cost or resource utilization.  

Exclusion formularies often place select medication(s) within a drug class that have clinically supported alternatives in a noncoverage status, which patients can appeal. Further concern exists for increased medical resource utilization and cost impact associated with an exclusion formulary.  

To examine the impact on medical and pharmacy costs, as well as medical resource utilization, a research team lead by Steven Champaloux MD, PhD,
and colleagues, conducted a retrospective cohort study designed to utilize administrative medical and pharmacy claims. Members of the analysis were required to be enrolled in a full-insured
line of business from January 2016 to December 2017. The outcomes observed by the researchers included medical and pharmacy costs, defined as annual plan and member expenditures, and medical resource utilization defined as annual member hospitalizations and emergency room visits.  

Researchers identified 116,300 exclusion formulary and 750,446 nonexclusion formulary members that met inclusion criteria. According to the study, from 2016 to 2017, the members of the exclusion formulary had lower pharmacy costs with no increase to medical costs compared to control groups. Further, the incidence rate ratios from 2016 to 2017 showed no significant difference for hospitalization and emergency room visits. Finally, lower pharmacy costs without a significant difference to medical costs or utilization was observed.  

“The exclusion formulary was associated with significant pharmacy savings and was not associated with increased medical cost or resource utilization,” Dr Champaloux and colleagues concluded.Further research is needed to evaluate how exclusion formularies impact health care. —Julie Gould