Understanding how formulary changes and drug exclusions affect patients is valuable information for plan sponsors and HR professionals. While necessary for managing plan costs, these adjustments can create challenges for the plan members they were designed to help. Let’s take a closer look at what happens when formularies shift and how these changes can impact patient health and out-of-pocket expenses.
What are Formulary Changes and Drug Exclusions?
A formulary is a list of prescription drugs which details coverage levels for every medication covered by a particular plan. Formularies are typically divided into different tiers based on cost sharing. The higher the tier, the higher the out-of-pocket cost is for patients. Â Â Drugs are often moved between tiers as a cost control measure. When a prescription medication is moved to a higher tier, patients pay more to keep taking it.
Prescription medications which do not appear on formularies, or are removed from formulary lists altogether, are called drug exclusions. This means a drug is no longer covered at all, leaving patients to either pay full retail price or switch to an alternative treatment.
How Do These Changes Impact Patients?
Formulary changes have a direct financial impact on patients.   A spike in co-pay and co-insurance may mean the drug is no longer affordable, forcing the patient to find a new medication. And when medication costs rise, studies show patients are more likely to skip doses or stop medications altogether. This lack of adherence can result in more doctor visits and avoidable complications. In other words, cutting medication costs today can lead to higher healthcare costs for the plan, and member frustration.
The Larger Impact: Health and Financial Consequences
Chronic conditions like diabetes or asthma require consistent medication management. Interruptions due to formulary changes can lead to worsening health and bigger medical bills down the road. While exclusions may reduce short-term costs for plan sponsors, poor adherence can drive up long-term expenses through increased ER visits or hospital stays.
Best Practices for Supporting Patients Through Formulary Changes
Making it easy for the member is the key to success. Formulary changes are often necessary to manage plan budgets, but it’s essential to help members navigate them.
Here are some best practices:
Proactively Communicate Changes:Â Give members a heads-up when formulary changes are coming so they can explore alternatives or consult with their doctors in advance.
Provide Clear, Accessible Information:Â Make it easy for members to understand changes and their options. Offering tools that provide alternatives and member support can go a long way.
Highlight Cost Transparency: Help patients avoid pharmacy surprises by giving them tools to compare medication prices. Scripta’s prescription shopping tool lets members shop around, so they aren’t left guessing at the counter.
Encourage Discussion with Healthcare Providers:Â Help members communicate with their doctors about alternatives that balance cost and clinical effectiveness.
Scripta Tips for Plan Sponsors:
Educate and Empower: Provide your members with tools like Scripta’s prescription shopping platform to help them make informed decisions with all their prescription options.
Monitor and Adjust:Â Keep an eye on adherence and prescription costs. If you notice a drop in adherence, and rising member out-of-pocket costs, consider outreach programs or financial assistance for those who are struggling.
Focus on Health Outcomes:Â Managing costs is important, but so is ensuring your members get the care they need.
By helping members make smart, affordable choices, you’ll not only manage costs but also support healthier outcomes for everyone involved.