Economic Impact of Cost-containment Strategies in Third Party Programmes in the US. Part II

This is the second article in a 2-part series that examines the economic impact of several different strategies used to control costs in third party programmes. This article investigates 5 different methods: (a) formularies; (b) capitation; (c) drug utilisation review; (d) prior approval; and (e) drug product selection. The published literature indicates that use of formularies decreases drug expenditures, but these savings may be offset by expenditures in other areas of healthcare programmes. Capitation, though less well studied than other strategies, may show some effectiveness in reducing costs by increasing generic dispensing and promoting switching from prescription drug to over-the-counter. Drug utilisation review, as a systematic programme of claims data review, has been shown to yield positive economic return in a variety of areas, including both impersonal and face-to-face educational interventions with healthcare practitioners. Prior approval and drug product selection both result in savings when examined in isolation from other aspects of healthcare. Cost-shifting, administrative costs and costs incurred because of possible decreased access to care have yet to be fully accounted for.