TODAY, A STRICTLY closed formulary is a rarity; however, more HMOs are limiting drug choices to reduce costs. Plans are also
reviewing formulary designs more frequently to keep up with emerging clinical science.
GETTY IMAGES / CRISTINA PEDRAZZINI
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The sanofi-aventis "Managed Care Digest Series/HMO-PPO Digest 2010-2011" indicates that the number of closed formularies in
three-tier designs jumped from 18.6% to 25.3% between 2008 and 2009, suggesting that HMOs are limiting drug choices for their
members to better manage costs. A majority of HMO members with one- (66.8%) or two-tier (71.3%) designs choose from a closed
formulary.
Randy Vogenberg, principal at the Institute for Integrated Healthcare (IIH), Sharon, Mass., says a truly closed formulary
doesn't really exist. Often, the closed formulary allows for prior authorization of nonpreferred drugs.
According to Douglas R. Hadley, MD, medical officer, coverage policy unit, CIGNA Pharmacy Management, CIGNA plan sponsors
typically have open formularies. Other common designs place all included prescription medications at one of three tiers: generic,
preferred and non-preferred. "We do have some clients that have closed benefit plans," Dr. Hadley says.
Prime Therapeutics, a pharmacy benefit manager, uses closed formularies for its Part D prescription drug plans and for most
Medicaid insureds.
"Our commercial plans have open formularies because of the nature of having three tiers," says David Lassen, chief clinical
officer for the PBM.
Although one of the Prime's objectives is to take a leaner approach to developing a formulary, Lassen says he is aware that
cutting a preferred drug list too drastically can have negative effects.
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