A value-based formulary takes into account individual illnesses and varies financial incentives determined by how important
a medication is to a patient," says Troyen Brennan, MD, chief medical officer for Aetna based in Hartford, Conn.
MHE EXECUTIVE VIEW
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Insurers such as Aetna, Health Net and UnitedHealth, along with many PBMs, are analyzing the cost of drugs in relationship
to overall healthcare costs, which helps reign in spending, improves quality and increases patient compliance with drug regimens.
Health Net's definition of a value-based formulary, according to Scott Wert, vice president, trade relations, Health Net Pharmaceutical
Services in Rancho Cordova, Calif., is similar to Dr. Brennan's: a value-based formulary places drugs on tiers based on effectiveness
as well as price—not just price alone.
"We are at-risk for medical and pharmacy costs so we have to keep an eye on the impact of drugs on overall healthcare," he
says. With all the talk about compliance and accessibility to appropriate drugs, a value-based formulary just might be the solution
for plan sponsors. Pitney Bowes, known for its postage meters, is one of the pioneers. It put all medications for diabetes,
asthma and hypertension on the first tier five years ago and has realized considerable reductions in annual drug spend.
ACCESSIBLE CHRONIC DISEASE DRUGS
Health Net of Arizona, a business unit of Health Net, introduced a four-tiered formulary in 2003, in which tier one and two
contain generics, and tier three and four preferred and non-preferred brands.
"We have moved branded drugs for chronic conditions, such as diabetes and asthma, to the second tier to encourage compliance
and a quicker payoff on the medical side," says Wert. In addition, the formulary automatically places branded drugs for HIV
and cancer on the second tier to increase accessibility and compliance.
Aetna is currently identifying conditions where medication has a large impact on outcomes, such as the use of beta blockers
after a heart attack, to determine how lower copayments may influence compliance. It will waive copayments for four of the
five most common medications for treating heart attack patients—beta blockers, statins, ACE inhibitors, angiotensin II receptor
blockers (ARBs) and aspirin. Dr. Brennan does caution, however, that decisions on financial incentives need to be individualized
and rely heavily on information systems.
Lonny Reisman, MD, CEO and founder of ActiveHealth Management in New York City, a health data technology unit of Aetna that
offers clinical decision support tools and disease management, culls millions of patient records and claims to find high-risk
patients who could benefit from lower copayments and other incentives. If a drug is not crucial to treating a particular condition,
such as the use of a beta blocker to prevent stage fright versus administration after a heart attack, for example, the patient
is likely to pay more.
"If a drug is needed, a health plan or plan sponsor should not set up any financial barriers to dissuade anyone from accessing
a medication," Dr. Reisman says. At this point, he says, it is important to manipulate plan design to meet the specific needs
of members.
ActiveHealth has developed its own value-based formulary, a customized drug list that takes a member's personal profile and
evidence-based sources into consideration. The program enables benefit designs and copayment structures that provide those
individual members, who derive the most clinical benefit from specific drugs, with the most financial incentive to use those
drugs.
NO GENERALIZATIONS
Timothy Heady, CEO of UnitedHealth Pharmaceutical Solutions, a division of UnitedHealthcare in Minneapolis, says that a value-based
formulary is consistent with the way the health plan manages its health spend.
"For example, generics are usually the best deal as far as costs go, but if a generic costs more than a brand, it is moved
to the second tier," he says. "The process starts with understanding the evidence and cost associated with a disease, the
role of the drug and whether or not compliance and persistency are affected by cost. We consider all of this information to
make drugs more affordable and easier to access."
