How effectively do managed care organizations influence prescribing and dispensing decisions?

Area of Science:

• Health Services Research
• Pharmaceutical Policy

Background:

• Managed care organizations (MCOs) employ various strategies to control prescription drug use and costs.
• Formularies, therapeutic interchange, and prior approval are key tools in MCOs' cost-containment efforts.

Purpose of the Study:

• To assess the utilization rates of formularies, therapeutic interchange, and prior approval by MCOs.
• To evaluate the effectiveness of these MCO tools in influencing prescribing and dispensing behaviors.

Main Methods:

• A comprehensive literature review was conducted using MEDLINE and International Pharmaceutical Abstracts.
• Included peer-reviewed studies from outpatient settings; utilization data primarily from marketing reports.

Main Results:

• Closed formularies reduce drug utilization but not always cost; used by ~50% of HMOs and 10% of employer plans.
• Prior approval programs reduce targeted drug use and costs; nearly all HMOs and most employer plans utilize them.
• Therapeutic interchange is used by ~50% of HMOs and employer plans; success varies by program type (voluntary vs. mandatory).

Conclusions:

• MCOs have experienced limited success in influencing prescribing and dispensing decisions with current tools.
• The overall impact of these cost-control measures is constrained by their inconsistent and often low rates of utilization.