Policies that restrict reimbursement on some drugs to ensure better use in health care

Large amounts of healthcare money is spent on medications, and these amounts are increasing. Spending more on medications could mean less money for hospitals, doctors and even other public services such as education or infrastructure. Misuse, overuse or underuse of medications may also result in poor health outcomes and a waste of money. Publically funded drug benefit plans look for ways to ensure better use of medications and to control costs without limiting health benefits. Policies that restrict reimbursement of specific prescription drugs -- often called 'prior' or 'special authorization' policies -- are one type of policy that may be used. Physicians generally apply on behalf of the patient and supply information verifying the patient's need before authorization is granted. These policies provide a safety valve when restrictions are applied by allowing for reimbursement when there is a need for the specific drug. If authorization is not obtained, an alternative and often cheaper drug with the same or similar benefit is reimbursed, or a patient may have the means to pay out-of-pocket expenses. Medications targeted for reduction in use are often newer, expensive drugs with cheaper, effective alternatives.

This review found 29 studies that evaluated policies that restrict reimbursement of specific prescriptions drugs. Where drugs have cheaper, effective alternatives and they target symptoms, this review found that reimbursement restriction polices can ensure better use of the medications with reduced costs and without an increase in the use of other health services, as would be expected if there were negative health effects of the restriction policies. Evaluation is required if alternative drugs are not effective substitutes. Removing restrictions for drugs that prevent complications of disease can result in an intended increase in their use as well as cost savings. When restrictions to reimbursement policies are designed using the best available evidence on the health impact of the medications, they support equitable access to the drugs that best support health by supporting the sustainability of publically subsidized drug plans.

A summary of this review for policy-makers is available here

Authors' conclusions: 

Implementing restrictions to coverage and reimbursement of selected medications can decrease third-party drug spending without increasing the use of other health services (6 studies). Relaxing reimbursement rules for drugs used for secondary prevention can also remove barriers to access. Policy design, however, needs to be based on research quantifying the harm and benefit profiles of target and alternative drugs to avoid unwanted health system and health effects. Health impact evaluation should be conducted where drugs are not interchangeable. Impacts on health equity, relating to the fair and just distribution of health benefits in society (sustainable access to publically financed drug benefits for seniors and low income populations, for example), also require explicit measurement. 

Read the full abstract...

Public policy makers and benefit plan managers need to restrain rising pharmaceutical drug costs while preserving access and optimizing health benefits.


To determine the effects of a pharmaceutical policy restricting the reimbursement of selected medications on drug use, health care utilization, health outcomes and costs (expenditures).

Search strategy: 

We searched the 14 major bibliographic databases and websites (to January 2009).

Selection criteria: 

Included were studies of pharmaceutical policies that restrict coverage and reimbursement of selected drugs or drug classes, often using additional patient specific information related to health status or need. We included randomised controlled trials, non-randomised controlled trials, interrupted time series (ITS) analyses, repeated measures studies and controlled before-after studies set in large care systems or jurisdictions.

Data collection and analysis: 

Two authors independently extracted data and assessed study limitations. Quantitative re-analysis of time series data was undertaken for studies with sufficient data.

Main results: 

We included 29 ITS analyses (12 were controlled) investigating policies targeting 11 drug classes for restriction. Participants were most often senior citizens or low income adult populations, or both, in publically subsidized or administered pharmaceutical benefit plans. Impact of policies varied by drug class and whether restrictions were implemented or relaxed. When policies targeted gastric-acid suppressant and non-steroidal anti-inflammatory drug classes, decreased drug use and substantial savings on drugs occurred immediately and for up to two years afterwards, with no increase in the use of other health services (6 studies). Targeting second generation antipsychotic drugs increased treatment discontinuity and the use of other health services without reducing overall drug expenditures (2 studies). Relaxing restrictions for reimbursement of antihypertensives and statins increased appropriate use and decreased overall drug expenditures. Two studies which measured health outcomes directly were inconclusive.