The Workers’ Compensation Research Institute (WCRI) published Monitoring Trends after Adoption of Drug Formularies, a series of studies examining the impact of formularies on prescription drug utilization and costs in five states that implemented formularies in 2018 and 2019.
The states that were analyzed include Arkansas, California, Indiana, Kentucky, and New York. The data was compiled from prescriptions filled between January 1, 2016, and March 31, 2021, by workers within 12 months of injury.
The California and New York formularies had immediate large impact on drug utilization and spend after they went into effect.
In California, overall drug payments per medical claim decreased by 39% from Q4 2017 to Q4 2018, due to a 33% decrease in the number of prescriptions. Changes in utilization were prominent for non-exempt drugs, opioids, musculoskeletal agents and physician-dispensed drugs.
Across California, prescriptions per claim for musculoskeletal therapy agents and opioids had the largest declines at 50% and 38% percent compared to other drug groups. The number of prescriptions per claim for non-exempt drugs decreased 40% and unlisted drugs decreased 22%.
Drugs exempt from prior authorization decreased 2%, suggesting a reduction in the number of prescriptions and a shift in the mix of the types of drugs dispensed. Physician-dispensed prescriptions per claim decreased 35%, whereas pharmacy-dispensed prescriptions increased 3%.
In New York, overall prescription payments per claim decreased 34% from Q3 2019 to Q1 2021, due to a 25% decrease in the number of prescriptions. Anticonvulsants and opioids had the largest declines in prescriptions at 34% and 35%, followed by musculoskeletal agents at 18%
The number of prescriptions per claim for drugs requiring prior authorization, such as non-formulary drugs, decreased 39%, and formulary drugs with limits decreased 16%. Prescriptions for formulary drugs increased 3%, suggesting some prescribers switched to formulary drugs not subject to prior authorization. Utilization of brand-named drugs with generic equivalents decreased 62%, but share of payments changed very little.
While the California and New York formularies saw great changes, little change in drug utilization and payments were seen in Indiana and Kentucky.
In Indiana, prescription payments per medical claim decreased by 8%, due to a 7% decrease in the number of prescriptions. Prescriptions per claim for musculoskeletal therapy agents and NSAIDs had declines at 9% and 7%, compared to opioids at 1%
Kentucky prescription payments per medical claim decreased 9%, due to a 9% decrease in amount paid per prescription, whereas utilization barely changed, with very little change across top drug groups. Prescriptions briefly decreased during the start of the COVID-19 pandemic. Finally, Arkansas showed steady declines prior to and after the formulary was in effect, however Arkansas and Indiana had other pharmaceutical policy interventions implemented simultaneously that may have impacted results.