We measure the impact of Medicaid formulary restrictions (FRs) on the rate at which patients who previously failed a drug therapy for schizophrenia are returned to that therapy.
We collect drug-level information on FRs in state Medicaid programs and examine claims of noninstitutionalized Medicaid enrollees with schizophrenia.
A difference-in-differences technique is used to compute the change in the probability of adverse outcomes before and after a state adopts an FR. This change is compared with the change in failure probabilities in states with no FRs.
Regardless of FRs, patients tend to resume the same drug after an adverse medical event. In 2005, 69% of inpatient mental health–related admissions resulted in patients resuming the same therapy within 6 months of the event, and 63% of patients resumed the same drug after a mental health–related emergency department admission. In states where FRs limit access to all atypicals, the likelihood of a patient resuming the same atypical after having ceased treatment for at least 30 days increases by 20.1% relative to patients in states without restrictions. Additionally, patients in states that impose FRs on all atypicals are 11.6% more likely to discontinue all treatments.
FR may increase the likelihood that patients will return to failed treatments or cease treatment altogether. Although formularies are designed to reduce drug spending, an unintended consequence may be an increase in the use of other services needed to treat patients with schizophrenia.
The full study is available at American Journal of Managed Care.