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Comparing tiered formularies and reference pricing policies: A systematic review


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Publication Topics

Comparing tiered formularies and reference pricing policies: A systematic review

Publication TypeJournal Article
Year of Publication2009
AuthorsMorgan SG, Hanley G, Greyson D
JournalOpen Medicine
Citation Key194
Full Text

Objectives: To synthesize and contrast comparable quality evidence from published literature regarding the outcomes of tiered formularies or therapeutic reference pricing of prescription drugs. Data Sources: We searched the following electronic databases: ABI-Inform, CINAHL, Clinical Evidence, Digital Dissertations and Theses, EBM Reviews (ACP Journal Club, CENTRAL, CDSR, CMR, DARE, HTA, NHSEED), EconLit, EMBASE, International Pharmaceutical Abstracts, MEDLINE, NLM Gateway, PAIS International and PAIS Archive, and the Web of Science. Reference lists of relevant articles were also searched, as were several grey literature sources. Review 
Methods: We sought English-language studies published from 1986 to 2007 that examined drug plan enrolees in developed countries who were subject to the introduction of either therapeutic reference pricing or tiered formularies, reported on outcomes relevant to patient care and cost effectiveness, and employed quantitative study designs that included concurrent or historical comparison groups. Potentially appropriate articles were abstracted and assessed using a modified version of the Cochrane Effective Practice and Organisation of Care Group (EPOC) data abstraction form.
Results: From an initial list of 2,964 citations, 12 studies were deemed eligible for inclusion in our review: 3 studies of reference pricing and 8 studies of tiered formularies. Reference pricing is associated with reduced plan spending, switching to preferred medicines, reduced overall drug utilization, and short-term increases in the use of physician services. Reference pricing (as implemented in British Columbia) is not associated with adverse health impacts. Tiered formularies are associated with reduced plan expenditures, increased patient costs, and increased rates of patient non-compliance. More research is required to examine the hypothesis that tiered formulary policies may result in increased use of physician services and potentially worse health outcomes.
Conclusion: The available evidence does not clearly differentiate reference pricing and tiered formularies in terms of policy outcomes. Reference pricing has a slight evidentiary advantage given that patient health outcomes under tiered formularies have not been well studies and that tiered formularies are associated with increased rates of medicine discontinuation.