Patient Outcomes and Cost Effects of Medicaid Formulary Restrictions on Antidepressants

Many state Medicaid programs have implemented policies designed to reduce spending on prescription drugs by restricting access to branded products. For patients with major depressive disorder, formulary restrictions could severely limit access to antidepressant therapies and disrupt care. We linked data on patient outcomes and spending from 24 state Medicaid programs to information on formulary restrictions from 2001 to 2008. Outcomes included frequency of MDD-related hospitalizations and ER visits per patient and total healthcare spending. We estimated the effect of the policies on patient outcomes and spending using a difference-and-difference approach. We found that restricting access to antidepressants increased the probability of an MDD-related hospitalization by 1.7 percentage points (16.6%). Furthermore, we found no evidence that these restrictions resulted in any net savings for Medicaid.