The most basic drug formulary is a descriptive list of medications available in a given health care setting. Early formularies were lists of all medications available in a hospital pharmacy. Eventually, some formularies began to limit the availability of unlisted agents, thereby serving a regulatory function. These "restrictive" formularies have been adopted by many health care payers as a method of containing costs by restricting access to expensive medications.
The use of formularies to control costs has been questioned on both scientific and policy grounds. Levy and Cocks extensively reviewed the literature on the effects of restrictive formularies on overall health care costs.8 The authors conclude that although drug costs decreased in categories where restrictions were imposed (16 of 27 published case studies), the predominant effect of these restrictions was to shift costs by increasing utilization of either non-restricted drugs or other health care services (13 of 16 studies). The authors conclude that none of the studies clearly showed an association between drug restrictions and reduced costs in other health service categories.
In a 1992 study, Moore and Newman found that while implementation of a restricted formulary could reduce a State's Medicaid drug expenditures, these savings are more than offset by spending increases caused by service substitution elsewhere in the system. This study included estimates for effects on spending for mental health services specifically, although particular pharmaceuticals were not mentioned.9
Horn and co-workers found that restricted formularies tended to increase utilization of other health care resources for patients with diagnoses of arthritis, asthma, epigastric pain/ulcer, hypertension, and otitis media.10,11 Because this study has encountered stringent criticism for methodological flaws, these results should be interpreted with caution.12
More recently, Streja and coworkers compared the outcomes of patients from an HMO in California that designated a single "preferred" SSRI agent (paroxetine) with the outcomes of patients enrolled in an HMO that designated two agents as preferred (paroxetine, fluoxetine). Patients were treated by the same group of 22 board-certified primary care physicians. These researchers found that patients from the HMO with a single preferred SSRI were 80% less likely to complete therapy than were patients from the HMO that had 2 preferred agents. Although differences in completion rates varied with the choice of first-line agent (paroxetine, fluoxetine, or sertraline), the formulary effect was independent of the initial drug used to treat the patient. This study is the first of its kind to show a direct impact of a limited formulary including newer antidepressants on outcomes, independent of the agent chosen for therapy.13