Physicians' prescribing responses to a restricted formulary: the impact of Medicaid preferred drug lists in Illinois and Louisiana.

ABSTRACT

OBJECTIVE: To determine the extent to which the strictness of the criteria used to control utilization of drugs not on a Medicaid preferred drug list (PDL) changes physician prescribing habits for non-Medicaid patients. STUDY DESIGN: Quasi-experimental design based on different timing of states' enactment of PDLs for cardiovascular medications. METHODS: A regression model was developed to analyze the effect that PDL implementation had on off-PDL product market share across 3 patient types (Medicaid, third-party insurance, and cash paying). The models included data from 2 states (Illinois and Louisiana) with different PDL prior-authorization criteria. The data allowed examination of different physician responses according to the proportion of Medicaid patients treated by the physician. The analysis also followed prescribing patterns longitudinally to determine whether the PDL-induced prescribing behaviors changed over time. RESULTS: There was a decrease of 9 percentage points (67.7%) and 6.2 percentage points (40.5%) in the Medicaid prescription share of restricted cardiovascular drugs post-PDL for Illinois and Louisiana, respectively. In the third-party insurance market, prescription shares of off-PDL drugs decreased 0.9 percentage points (6.8%) in Illinois and 1.3 percentage points (8.6%) in Louisiana. For physicians with a high percentage of prescriptions paid for by Medicaid, the share loss for off-PDL drugs was estimated to be more than 37% for the non-Medicaid portion of the practice. CONCLUSION: The effects of a Medicaid PDL on prescribing behavior extend beyond the Medicaid population. The health outcomes and economic consequences of these "spillover" effects are poorly understood and warrant further research.