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The Effect of Managed Care on Prescription Drug Costs and Benefits

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  • Drug Costs and Benefits Under Managed Care
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Abstract

This review discusses the approaches to prescription drug payment practices taken by managed care to influence drug use and costs, and presents the research evidence supporting these interventions.

In the US, drugs were infrequently covered as an ambulatory benefit under fee-for-service indemnity insurance; however, health maintenance organisations almost always provide outpatient drugs and consequently have developed approaches to influence drug use and manage its costs.

Managed care as a set of tools and as an organisational form is moving toward more restrictions on direct access to pharmaceuticals as a covered benefit. Options for influencing drug use and cost may address access, ingredient costs, dispensing fees and cost sharing. The formulary process is the foundation for a managed pharmacy benefit and integrates these options.

The limited empirical evidence for an effect of managed care on drug costs and use is reviewed. A proposed research agenda includes evaluation of the effects of restrictive formularies, capitation, disease management and other programmes to influence the cost and use of pharmaceuticals.

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  1. Department of Health Policy and Management, School of Hygiene and Public Health, Johns Hopkins University, 624 N. Broadway, Room 609, Baltimore, Maryland, 21205-1901, USA

    Alan Lyles

  2. Center on Drugs and Public Policy, University of Maryland School of Pharmacy, Baltimore, Maryland, USA

    Francis B. Palumbo

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  1. Alan Lyles
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Correspondence to Alan Lyles.

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Lyles, A., Palumbo, F.B. The Effect of Managed Care on Prescription Drug Costs and Benefits. Pharmacoeconomics 15, 129–140 (1999). https://doi.org/10.2165/00019053-199915020-00002

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