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Spillover effects of restrictive drug formularies: a case study of PacifiCare in California
1Public Policy Department, AstraZeneca Pharmaceuticals, Wilmington, Del 19850-5437, USA. y.richard.wang@astrazeneca.com
Background:
A restrictive drug formulary may influence how physicians treat other, unaffiliated patients, a phenomenon known as the "spillover effect." In a previous study we found significant spillover effects from Maine's Medicaid formulary.
Objective:
To determine whether similar spillover effects exist for private insurers with less restrictive formularies and less dominant market presence.
Study Design:
We treated PacifiCare's formulary changes for proton pump inhibitors (PPIs) as a natural experiment and studied whether these changes spilled onto non-PacifiCare patients in California. Rabeprazole and pantoprazole are the newly preferred PPI products.
Methods:
We analyzed the physician-level before-and-after changes in prescribing of rabeprazole and pantoprazole for PacifiCare and non-PacifiCare patients. We also estimated the effect of PacifiCare share of practice on spillover effects using linear regressions.
Results:
The number of rabeprazole and pantoprazole prescriptions increased simultaneously for non-PacifiCare patients and the increase was positively associated with PacifiCare share of practice. For non-PacifiCare prescriptions, a 10% increase in PacifiCare share of practice led to a 3.3% share increase for rabeprazole and a 1.6% share increase for pantoprazole, respectively (both P < .001).
Conclusions:
PacifiCare's PPI formulary changes generated significant spillover effects onto non-PacifiCare patients in California.
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