Study Findings from Duke Clinical Research Institute Broaden Understanding of Managed Care (Using a Budget Impact Model Framework To Evaluate Antidiabetic Formulary Changes and Utilization Management Tools)

2019 MAR 29 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Research findings on Managed Care are discussed in a new report. According to news reporting out of Durham, North Carolina, by NewsRx editors, research stated, “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.”

Financial supporters for this research include Agency for Healthcare Research and Quality (AHRQ), AHRQ.

Our news journalists obtained a quote from the research from Duke Clinical Research Institute, “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. For the 623,827 affected by the formulary and UM policy changes, the model predicted annual savings that increased from $24 million in the first year to $43 million in the third year after the changes. The majority of savings came from drug acquisition costs, as opposed to rebates, copays, and dispensing fees. Sensitivity analyses found savings across all varied parameters and scenarios except an unlikely scenario when 0% of utilization switched from nonpreferred to preferred agents.”

According to the news editors, the research concluded: “The model also predicted that the formulary and UM policy changes would lead to $529,439 in savings from medical visit costs in Year 3. This budget impact model predicted cost savings from the payer’s formulary and UM policy changes.”

For more information on this research see: Using a Budget Impact Model Framework To Evaluate Antidiabetic Formulary Changes and Utilization Management Tools. Journal of Managed Care & Specialty Pharmacy, 2019;25(3):342-+. Journal of Managed Care & Specialty Pharmacy can be contacted at: Acad Managed Care Pharmacy, 100 N Pitt St, 400, Alexandria, VA 22314-3134, USA.

Our news journalists report that additional information may be obtained by contacting A. Hung, Duke Clin Res Inst, 200 Morris St, Durham, NC 27713, United States. Additional authors for this research include C.D. Mullins, J.F. Slejko, F. Shaya, S.T. Haines and A. Lugo.

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