Using a Budget Impact Model Framework to Evaluate Antidiabetic Formulary Changes and Utilization Management Tools

Journal of Managed Care & Specialty Pharmacy
Anna HungAmy Lugo

Abstract

Traditional budget impact models predict the financial consequences of a new drug entering the market. This study provides an example of applying the budget impact framework to a new research question of interest to managed care organizations-what is the budget impact of our formulary and utilization management (UM) policy changes? To predict the 3-year annual budgetary impact of TRICARE's antidiabetic formulary and UM policy changes using TRICARE claims data. A budget impact model was built in Microsoft Excel using health plan claims data for a 3-year time horizon. Model outcomes included spending on antidiabetic medications and medications used for side effect treatment. In sensitivity analyses, medical costs from inpatient, outpatient, and emergency room visits were also estimated. Model inputs included health plan antidiabetic medication utilization, as well as publicly available drug cost, rebate, dispensing fee, and patient cost-sharing estimates. Type of enrollee and pharmacy were also incorporated into the model. Sensitivity analyses varied estimates for utilization switch rates between preferred and nonpreferred agents, drug costs, rebates, and dispensing fees, as well as predicted impact from implementation delays. Fo...Continue Reading

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Citations

Jul 28, 2019·Journal of Managed Care & Specialty Pharmacy·Anna HungC Daniel Mullins
Jul 28, 2019·Journal of Managed Care & Specialty Pharmacy·Anna HungC Daniel Mullins

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