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    • Patient Assistance Programs
    • Policies Limiting Choice of Prescription Drugs
      • Prescription Drug Formularies
      • Preferred Drug Lists
    • Medicare Prescription Drug Benefit
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Pfizer Public Policy: Policies Limiting Choice of Prescription Drugs

Within the past decade, many people have been affected by changes in their prescription drug coverage that have limited the types of pharmaceuticals available to them. Barriers include restrictions imposed by governments, private insurers, and hospitals on which drugs can be prescribed or dispensed. These restrictions have impacted people with private health insurance, as well as those with government-sponsored coverage.

Alterations in prescription coverage have been made with the intent of reducing the cost of pharmaceuticals to health care payers (employers, health plans, and governments). While cost containment is an understandable goal, there is evidence that limitations on the availability of pharmaceuticals might be harmful to patients and that such constraints may actually lead to an unintended increase in overall health care costs.

Key Points

• Pfizer favors policies that preserve physicians' ability to prescribe drugs that they and their patients believe are best.
• Policies such as formularies and Preferred Drug Lists (PDLs), which limit the choice of drugs physicians can prescribe, fail to treat patients as individuals with specific health care needs and different reactions to medicines.
• Restrictions on pharmaceuticals may increase overall health expenditure by increasing the need for other, potentially more expensive, types of treatment such as hospital care.

A few of the most significant changes in prescription drug coverage include the expansion of formularies by private health plans, and Preferred Drug Lists (PDLs) by some states' Medicaid programs.

Prescription drug formularies are lists of drugs that are preferred by a health plan, employer, or pharmacy benefit manager. Though designs vary significantly, formularies generally discourage access to certain drugs by selecting preferred drugs, requiring pre-approval for some medications, or categorizing drugs into different tiers and holding consumers responsible for increasing co-pays for medicines based on their tier categorization. Cost is often the major factor in determining what drugs get favored status. This includes not only the price of the drug, but also the amount of discount the payer or pharmacy benefit manager (PBM) can get for them.

The restrictiveness of formularies can vary substantially. "Open" formularies allow patients to access non-preferred drugs by paying higher co-pays, while "closed" formulary arrangements only provide coverage for those drugs on the formulary. The most stringent pharmaceutical restrictions make it difficult for health care providers to prescribe the drugs they believe are best for their individual patients, and sometimes impose requirements on pharmacists to dispense a particular drug even if the physician wants the patient to receive another similar drug.

Pfizer believes that policies should cover the broadest array of medicines possible. Research shows that patients benefit from a wide choice of therapies, and that the same drug can react differently in two different people. Given this fact, it's likely that narrowing the array of products doctors can prescribe limits their ability to meet the medical needs of individual patients. The Pharmaceutical Research and Manufacturers of America (PhRMA) has provided the following summary of the research on the subject: Why Patients Need a Choice of Medicines.

The main goal of formularies and PDLs is to encourage physicians to prescribe and patients to use specific drugs in an effort to save the health payer money on pharmaceutical expenditures. But if cost savings are the aim, evidence suggests that formularies may not be the answer. Formularies, and in particular closed formularies such as Medicaid PDLs, may have unintended negative effects on a patient's health and compliance with their drug regimens, and this may actually lead to an increase overall health costs.

• Research has shown that implementation of tiered formularies is associated with a reduction in the percentage of people adhering to their drug regimens, and an increase in need for hospital care. For more information, see Prescription Drug Formularies.
• A number of studies have highlighted the negative health impact of PDLs, suggesting that they are associated with an increase in patients' need for other, often more expensive, types of health care.Studies have also revealed that PDLs may exacerbate health disparities. For more information, see Preferred Drug Lists (PDLs).

In This Section

Prescription Drug Formularies

Learn more about prescription drug formularies.

• Visit Prescription Drug Formularies

Preferred Drug Lists (PDLs)

Learn more about preferred drug lists

• Visit Preferred Drug Lists (PDLS)

Last Updated September 2007

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