Determinants of HMO formulary adoption decisions.

  • Dranove D
  • Hughes E
  • Shanley M
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Abstract

OBJECTIVE: To identify economic and organizational characteristics that affect the likelihood that health maintenance organizations (HMOs) include new drugs on their formularies. DATA SOURCES: We administered an original survey to directors of pharmacy at 75 HMOs, of which 41 returned usable responses. We obtained drug-specific data from an industry trade journal. STUDY DESIGN: We performed multivariate logistic regression analysis, adjusting for fixed-drug effects and random-HMO effects. We used factor analysis to limit the number of predictors. DATA COLLECTION METHODS: We held initial focus groups to help with survey design. We administered the survey in two waves. We asked respondents to report on seven popular new drugs, and to describe a variety of HMO organizational characteristics. PRINCIPAL FINDINGS: Several HMO organizational characteristics, including nonprofit status, the incentives facing the director of the pharmacy, size and make-up of the pharmacy and therapeutics committee, and relationships with drugs makers, all affect formulary adoption. CONCLUSIONS: There are many organizational factors that may cause HMOs to make different formulary adoption decisions for certain prescription drugs.

Author-supplied keywords

  • 1 the term is
  • 2 today
  • a drug formulary is
  • a hospital pharmacy stocks
  • a list of approved
  • associated with hospitals
  • drugs
  • formularies are an
  • formulary
  • historically
  • hospital formulary and some
  • managed care
  • nonformulary items
  • pharmacoeconomics
  • those drugs on the

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Authors

  • David Dranove

  • Edward F X Hughes

  • Mark Shanley

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