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
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.
Recommended Related to Health Insurance & Medicare
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
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."
Complaints about formularies are common, says Laurie Norris, a supervising
counselor for the Health Rights Hotline, a pilot project based in Sacramento,
California, that helps consumers navigate managed care. "It's one of our
highest reported problems," she says. What's more, she says, "managed
care plans change formularies constantly," making matters more
Consumers may get some help if a new federal bill becomes law. Introduced in
November and called the Patients' Formulary Rights Act of 1999, the bill would
require managed care plans to inform their members about their formularies,
provide them with a list of included drugs, and tell them how they can continue
to get needed drugs if the formulary changes.
In the meantime, though, most consumers with formulary problems must be
their own advocates. So what if there's a drug you need and it's not on the
formulary? Or suppose you change HMOs and the prescription drug you've been
taking successfully for months isn't on the new plan's list? What can you
The Strategy: Learn About the Formulary
First find out exactly what kind of formulary your plan has. Some have a
single formulary list. Others include restrictions on some drugs, prescribing
them only for certain conditions.
Still others have a three-tier plan. These plans allow you to choose a
generic drug on the formulary, a name brand on the formulary, or a drug not on
the formulary at all. But, Pisano says, your co-payment goes up when you choose
the name brand over the generic, and the third option costs you the most of