• Peter J Neumann, Pei-Jung Lin, Dan Greenberg, Marc Berger, Steven Teutsch, Edward Mansley, Milton C Weinstein, and Allison B Rosen.
• Department of Health Policy and Management and Center for Risk Analysis, Harvard School of Public Health, Boston, MA 02115, USA. pneumann@hsph.harvard.edu
• Am J Manag Care. 2006 Jan 1; 12 (1): 30-6.

ObjectiveTo investigate the extent to which preferred drug lists and tiered formularies reflect evidence of value, as measured in published cost-utility analyses (CUAs).MethodsUsing 1998-2001 data from a large registry of cost-effectiveness analyses, we examined the 2004 Florida Medicaid preferred drug list and the 2004 Harvard Pilgrim Pharmacy Program 3-tier formulary, and compared cost-utility ratios (standardized to 2002 US dollars) of drugs with preferred and nonpreferred status.ResultsFew drugs on the formularies had any cost-utility data available. Of those that did, median cost-utility ratios were somewhat higher (less favorable) for Florida's preferred drugs compared with the nonpreferred drugs (25,465 dollars vs 13,085 dollars; P = .09). Ratios did not differ for drugs on tiers 1 and 2 of the Harvard Pilgrim formulary, although they were higher for tier 3 and for excluded drugs (18,309 dollars, 18,846 dollars, 52,119 dollars, and 22,580 dollars, respectively; P = .01). Among therapies reported to be cost-saving or to have cost-utility ratios below 50,000 dollars, 77% had favored status in Florida Medicaid and 73% in Harvard Pilgrim. Among dominated drug interventions (reported to be more costly and less effective than alternatives), 95% had favored status in Florida Medicaid and 56% in Harvard Pilgrim.ConclusionsThis study underscores the paucity of published cost-utility data available to formulary committees. Some discrepancies prevail between the value of drugs, as reflected in published cost-utility ratios, and the formulary placement policies of 2 large health plans.

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