The high cost of prescription drugs is a significant challenge for many Americans, and health plans often use drug benefit strategies to help manage costs.

However, two popular drug benefit strategies – formularies and copay structures – can have unintended consequences for health equity. In this article, we will discuss these two strategies and their potential impact on health equity.

Formularies

A formulary is a list of prescription drugs that a health plan covers. Formularies are intended to help control prescription drug costs by limiting coverage to only the most effective and cost-effective drugs. However, formularies can also have unintended consequences for health equity.

One potential consequence of formularies is that they may limit access to needed medications for certain populations. For example, if a formulary does not cover a specific drug used to treat a particular health condition, patients who need that drug may not be able to afford it or may have to switch to a less effective medication. This can disproportionately impact vulnerable populations, such as low-income individuals or those with chronic health conditions.

Formularies may also create disparities in care between different patient populations. For example, if a health plan's formulary does not include a drug commonly used to treat a specific condition in one geographic area, patients in that area may not have access to the same standard of care as those in areas where the drug is covered. This can lead to disparities in health outcomes and exacerbate existing health inequities.

Copay Structures

Copay structures are another common drug benefit strategy used by health plans to manage costs. Copay structures determine the amount that patients must pay out of pocket for each prescription drug they receive. Typically, copays are higher for brand-name drugs than for generic drugs, as well as for drugs that are not on the plan's formulary.

Like formularies, copay structures can have unintended consequences for health equity. One potential consequence is that they may discourage patients from taking necessary medications. For example, if a patient cannot afford the out-of-pocket costs associated with their medications, they may choose to skip doses or stop taking their medications altogether. This can lead to poor health outcomes and exacerbate existing health inequities.

Copay structures may also disproportionately impact vulnerable populations. For example, low-income individuals may be more likely to skip doses or stop taking medications due to high copays, leading to worse health outcomes compared to higher-income individuals who can afford their medications.