Third antidepressant tier requires careful design

Adding a third, more costly copayment tier for antidepressants reduces a member’s probability of using an antidepressant and also increases out-of-pocket spending by those who do use such a drug. This type of formulary design could be a problem for current users of antidepressants, says Dominic Hodgkin, PhD, associate professor at the Heller School of Social Policy and Management at Brandeis University. He is a coauthor of “The effect of a three-tier formulary on antidepressant utilization and expenditures” in the Journal of Mental Health Policy and Economics.

In the study, total spending per user decreased after introduction of a three-tier formulary, indicating that the enrollees were somewhat responsive to the formulary change, shifting away from the drugs that were nonpreferred. However, enrollee response was only partial, as indicated by an increase in out-of-pocket spending.

“When a health insurer implements a three-tier formulary, there are two extremes exhibited: In one, all members may switch to preferred drugs. In that case, the patients don’t get hit in the pocket. The other extreme is where the patients are unable to switch, and end up paying more out-of-pocket costs. In our study, the response was somewhere between those two.”

“Health plans may want to consider grandfathering in users when switching a drug from one tier to another. It might have taken a long time to find the right drug that works for the patient. You don’t want to yank him off it now, just for cost reasons,” says Hodgkin. “The plan could apply the copayment change to new users, not existing users.”

Antidepressant prescriptions per enrollee

Use of antidepressants grew more slowly for enrollees who switched to a three-tier formulary than for other enrollees who stayed with a two-tier formulary.

Annual antidepressant payments per user, by source of payment

Out-of-pocket payments per user per period increased by $16 in the three-tier group compared to only $3 in the comparison group. Concurrently, plan payments per user decreased $12 in the three-tier group and increased $18 in the comparison group.

Source: Hodgkin D, Thomas CP, Simoni-Wastila L, Ritter GA, et al. The effect of a three-tier formulary on antidepressant utilization and expenditures. J Men Health Policy Econ. 2008;11:67–77.

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