Impact of 3-tier formularies on drug treatment of attention-deficit/ hyperactivity disorder in children

Background: Expenditures for medications used to treat attention-deficit/ hyperactivity disorder (ADHD) in children have increased rapidly. Many employers and health plans have adopted 3-tier formularies in an attempt to control costs for these and other drugs. Objective: To assess the effect of copayment increases associated with 3-tier formulary adoption on use and spending patterns for ADHD medications for children. Design and Setting: Observational study using quasi-experimental design to compare effects on ADHD medication use and spending for children enrolled as dependents in an employer-sponsored plan that made major changes to its pharmacy benefit design and a comparison group of children covered by the same insurer. The plan simultaneously moved from a 1-tier (same copayment required for all drugs) to a 3-tier formulary and implemented an across-the-board copayment increase. The plan later moved 3 drugs from tier 3 to tier 2. Participants: An intervention group of 20 326 and a comparison group of 15776 children aged 18 years and younger. Main Outcome Measures: Monthly probability of using an ADHD medication; plan, enrollee, and total ADHD medication spending; and medication continuation. Results: A 3-tier formulary implementation resulted in a 17% decrease in the monthly probability of using medication (P<.001), a 20% decrease in expected total medication expenditures, and a substantial shifting of costs from the plan to families (P<.001). Intervention group children using medications in the pre-period were more likely to change to a medication in a different tier after 3-tier adoption, relative to the comparison group (P=.08). The subsequent tier changes resulted in increased plan spending (P<.001) and decreased patient spending (P=.003) for users but no differences in continuation. Conclusions: The copayment increases associated with 3-tier formulary implementation by 1 employer resulted in lower total ADHD medication spending, sizeable increases in out-of-pocket expenditures for families of children with ADHD, and a significant decrease in the probability of using these medications.