Battling the HMO Formulary
Your health plan may not cover the drugs you want.
If your case is average, your managed care plan spends about $117 on you each year for prescription medicines. The typical managed care plan spends a considerable chunk of its budget -- an average of 11% -- on prescription drug costs, according to the SMG Marketing Group in Chicago, which gathers this data each year.
So from a business point of view it's understandable why managed care organizations want to cut costs on prescription drugs as much as they can.
Thus was born the formulary -- the list of drugs that doctors may prescribe under the plan. Typically, a managed care plan relies on a committee made up of physicians and others to decide which drugs will appear on its formulary. The committee evaluates the safety and effectiveness of each drug, and if they judge that two drugs are equally effective, they generally opt for the one that costs less.
Some disgruntled consumers say formularies are all about saving money. But that's not so, says Susan Pisano, a spokeswoman for the American Association of Health Plans, an industry organization in Washington, D.C. "Formularies are put together with quality trumping cost," she says.
But drug manufacturers pressure the committees to include their products, says Steven Gray, PharmD, the pharmacy professional affairs director for the California division of Kaiser Permanente. "Drug manufacturers' sales representatives are trained and motivated to sell their drugs, and there are big bucks involved."