The Impact of Benefit Design and Formulary Practices on Opioid Abuse and Overdose

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DESCRIPTION (provided by applicant): The proposed research will study whether benefit design and formulary management - two common tools in health insurance generally - can be applied to address the public health problems of prescription drug abuse and overdose. Despite the ubiquity of benefit design and formulary management in health insurance generally, there is very little existing research on how these strategies can reduce opioid abuse and its health and economic consequences. We propose to evaluate the impact of changes in these strategies on (1) claims-based measures of opioid utilization that are indicators of misuse (e.g., polypharmacy, "doctor shopping", dosage, and prescription counts); (2) health outcomes (e.g., overdose) associated with opioid misuse and abuse and extrapolated from claims data; and (3) associated health system spending. We propose to conduct our evaluation in two different but related patient populations and health care system settings, namely workers' compensation and SSDI-eligible disabled Medicare populations. We selected these populations and systems because they have both recently experienced changes in different aspects of benefit and formulary strategy, and because workplace injuries and certain disabilities are associated with higher utilization of opioids and other drugs with the potential for abuse. Our quasi-experimental, differences-in-differences evaluation methodology leverages differences across two large US states, Texas and California, to maximize inference on specific policy changes. Our Specific Aims are to 1.) Develop and apply pharmacy claims-based measures of opioid utilization; 2.) Assess whether the introduction of a closed drug formulary affects opioid utilization, abuse-related health outcomes, and associated spending in a workers' compensation population; and 3.) Assess whether Medicare Part D cost sharing and formulary management affect opioid utilization, abuse-related health outcomes, and associated spending. The proposed research directly addresses two Healthy People 2020 priorities: 1.) reduce drug induced deaths; and 2.) reduce the past-year nonmedical use of prescription drugs. The study recognizes the links between access to opioid prescriptions, misuse of prescription drugs, abuse of prescription drugs, and harms in terms of health outcomes and associated costs to the health care system. It will contribute to the evidence base linking policy tools to changes in outcomes related to prescription drug abuse and overdose. In the case of this study, the policy tools of interest have both public policy and private-sector implications and potential for implementation. Benefit design and formulary management are ubiquitous tools in health insurance, but their link to outcomes related to prescription drug abuse and its consequences is poorly understood. Our proposed research will provide insurers and policymakers with the information needed to craft more effective strategies to reduce misuse, abuse, and overdose due to prescription drugs.