Health Plan Prescription Drug Formularies

Only physicians have the authority to write prescriptions for their patients. Often, a physician determines over time that a patient responds best to a specific drug. The physician and patient have learned that neither the generic version of that drug nor a medication in another therapeutic class works best for the patient. Rather than allow the pharmacist to dispense the specifically prescribed drug, some health plans and pharmacy benefit managers (PBMs) engage in a practice known as “therapeutic substitution” to save the health plan and PBM money.

Pharmacists are instructed by the health plan or PBM to dispense a drug different from the one the physician prescribed — sometimes without the patient’s or physician’s consent. This is wrong and could harm the patient — especially patients who are elderly, medically fragile, or have mental health conditions.

Patients and their physicians have a right to know up front what prescriptions the health plan allows — not after the patient fills the prescription. Greater transparency is needed.  Legislators need to take steps to ensure patients get the prescription that best fits their treatment plan.

Medicine’s 2011 Agenda: 

Support legislation that:

  • Prohibits health plans and PBMs from replacing the drug ordered with a drug from another tier without the patient’s or the prescribing physician’s consent; 
  • Requires health plans to disclose (1) the use of formularies, (2) provisions for cases where a physician prescribes a drug not on the formulary, and (3) incentives used to encourage physicians to consider costs when prescribing; and
  • Requires health plans to disclose any relationships with PBMs or pharmaceutical companies that could influence the composition of the formulary or the dispensing of prescribed drugs.

In addition, support legislation that adopts the recommendations in the Texas Department of Insurance (TDI) report on PBMs which:

  • Extend enrollee protections found in large group plans to small employer and individual health plans;
  • Clarify that the independent review of a denied prescription drug claim is to be paid by the carrier, and the decision of the review is binding on the carrier;
  • Direct TDI to inform enrollees of the right to an independent review; 
  • State that limitations in prescribed drug amounts constitute an adverse determination that an enrollee may appeal; and
  • Requires carriers/PBMs to post accurate and complete drug formularies online.

Medicine’s Message

  • Patients and their physicians need to clearly understand a health plan’s prescription drug formularies so they can make good health care decisions. Health plans should publish this information in marketing materials and online.
  • A patient’s treatment plan and health can be jeopardized when the prescribed drug is substituted without the patient’s or physician’s knowledge or consent.
  • All patients should have the same protections as those with large group coverage. Those protections should include formulary disclosures, the opportunity to continue drug coverage that was dropped from the formulary, and the ability to appeal a health plan’s denial of a prescribed drug.