Description and Analysis of the VA National Formulary (2000) / Chapter Skim
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Is the VA National Formulary Overly Restrictive and Does it Prevent Physicians from Meeting the Health Care Needs of Veterans?
Is the VA National Formulary Overly Restrictive and Does it Prevent Physicians from Meeting the Health Care Needs of Veterans?
Pages 37-71
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From page 37... ...
At its root, the restrictiveness of the VA National Formulary, including the local, VISN, and national lists and systems, and the nonformulary exceptions processes, is a measure of the stringency of the controls on veterans' access to prescribed medicines at the appropriate times. Comparisons with other systems 37
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From page 38... ...
The committee concluded that the key elements in the VA National Formulary are the number of classes closed, number of drugs in closed classes, responsiveness of the nonformulary process, and sensitivity of the therapeutic interchange policy and Elements of Restrictiveness · Formulary size · Coverage of agents in different therapeutic classes · Timeliness of addition of drugs newly approved by the Food and Drug Administration · Reappraisal of formulary listings Appropriateness and responsiveness of the nonformulary process Access to nonformulary drugs Sensitivity of therapeutic interchange policy and procedure · Over-the-counter coverage, generic substitution
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From page 39... ...
The committee concluded that the most important limits incorporated into restrictive designs were exclusions, volume or quantity limits that were unresponsive to medical necessity, drugs not being listed in a closed class, or not included or covered in the formulary, high copayments (these are also not related to medical necessity) , and administratively and medically strict prior approval or nonformulary exceptions processes.
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From page 40... ...
or other solutions, that is, items that would not be considered typical pharmaceuticals and are often not included in other formularies. About 15 of the listings indicate that a drug class is under review without referring to any specific agent.
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From page 41... ...
Required use of generic drugs Nonformulary Coverage of nonformulary Copay to influence choice Cost containment 100 100 100 1 OOe o Limits on number of Rxs per patient at any time 0 Limits on refills Limits on duration of use of some drugs Limits on the supply of drugs per Rx Presence of a PA process for some drugs Waiting period requirements for new FDA approved drugs o o 100 o oof oof Six months or more wait period Active monitoring of new FDA-approved drugs: Drugs for the treatment of AIDS or cancer 100 FDA "lP" drugs Appeals process Internal appeals process for excluded drugs Internal appeals process for nonformulary drugs Independent external review of appeals process Continuation of care Policy requires continuation of care for a few specific drugs Policy requires continuation of care for all drugs 3.5 71 38 100 100 23 46 21 71 53 6 71 34 o 100 100 o Og Og 47 19 7 9 NOTE: DESI = Drug Efficacy Study Implementation; DUR = drug utilization review; FDA = Food and Drug Administration; PA = prior approval; 1P = FDA priority; P&T = pharmacy and therapeutics. aReflects the composition of VISN formulary (P&T)
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From page 42... ...
Are the closed classes limited to a reasonably small number for which economic and O ........
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From page 43... ...
contained less than 1,000 items, and 37% were in the 750-999 category (Hoechst Marion Roussel, 1998~. A majority of MCO formularies were closed or partially closed (Novartis, 1999~.
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From page 44... ...
Closed and Preferred Drug Classes in the VA The VA National Formulary's closed classes, the quality of the listings as affected by the quality of the input of P&T committees, the MAP, and VA PBM (see Chapter 4 of this report) , and the access afforded through a nonformulary exception process are probably more important measures of restrictiveness than overall Formulary size.
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From page 45... ...
In theory, more local options are provided in these classes because VISNs and facilities are free to supplement the national list. However, economics drive the choice to the nationally contracted drugs in the preferred class and may encourage changes in prescribing by physicians or initiate therapeutic interchanges.
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From page 46... ...
MCO formularies also often restrict expensive, brand name products through higher copayments (Hoechst Marion Roussel, 1998, Smith, 1993~. Drugs in VA closed or preferred classes, although not chemically identical, are similar in therapeutic effect.
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From page 47... ...
claimed that the VA National Formulary severely limits choice among brand name agents in six drug classes, three of them current VA National Formulary closed classes. These authors provided no evidence of effects on veterans' health outcomes by National Formulary restrictions in these classes.
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From page 48... ...
Although almost all state Medicaid formularies are open, they all exclude some drugs, for example, one or more of anorexiants, hair growth and other cosmetic drugs, fertility drugs, male impotence drugs, smoking cessation drugs, all or some OTC drugs, all or some drugs listed in OBRA 1990 (see Glossary) , Drug Efficacy Study Implementation (DESI)
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From page 49... ...
The use of VHA nonformulary or noncontract agents is close to zero in many cases (see, for example, PPI utilization data for omeprazole, Figure 4.2~. In closed classes with national committed-use contracts, where Contract Adherence Reports identify that a VISN's nonformulary drug use is greater than two standard deviations above mean VHA nonformulary drug use, this is brought to the attention of the VISN.
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From page 50... ...
A smoothly functioning, responsive nonformulary exceptions process, especially for drugs in the closed classes in which most VISN formularies lost options in 1997, would substantially mitigate any untoward effects of these restrictions. ADDITION OF NEW DRUGS AND FORMULARY REAPPRAISAL National Policy Regarding New Drugs Under current policy, drugs newly approved by the FDA are considered for addition to the VA National Formulary only after a 1-year delay, except in special cases of important new 1P category drugs, that is, new chemical entities classified for priority review by the FDA (VHA Directive 97-047~.
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From page 51... ...
Prescribers can formally ask for additions, either of newly approved drugs or of existing drugs, to the local, VISN, or through VISN Formulary leaders to the National Formulary. Many VISNs have standardized forms for such requests that require scientific analysis and justification.
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From page 52... ...
Many decisions on drug class reviews, therapeutic guidelines, and Formulary additions are made in the professional judgment of the MAP, VA PBM, and VISN Formulary leaders and are memorialized in the minutes of their meetings. From an examination of these minutes and observation of a MAP/VA PBM meeting in August 1999 by the committee and IOM staff representatives, these groups appear to be appropriately expert professionals functioning in a thoughtful manner.
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From page 53... ...
This resolves the natural tension between a uniform, standardized national entitlement and local autonomy and flexibility, at least in part in favor of local preferences and loosened control. Of course, in theory, VISN or local Formulary additions might not be needed given a very smooth, nationally consistent nonformulary process.
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From page 54... ...
If they continue to expand and especially if they add newly approved new chemical entities and 1P drugs and the National Formulary does not at some point, veterans who move from one VISN to another may encounter drug access problems, as observed earlier. This might be mitigated if the nonformulary exceptions process is operating smoothly and uniformly.
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From page 55... ...
Recent data from the AMCP survey indicate even fewer PBMs and MCOs with wait policies and an even higher likelihood of review, and presumably addition, of new drugs (Figure 2.4 and Table 2.1~.There do not appear to be any VHA policies on periodic complete formulary reviews or external evaluations, although additions and deletions to the National Formulary are posted on the Internet several times a year. Review of MCO formularies is carried out quarterly by 48% of plans and at least annually by about 85% (Hoechst Marion Roussel, 1998~.
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From page 56... ...
A long lag in adding newly approved drugs and low percentages of these drugs added to formularies were not unusual in pre-OBRA 1990 Medicaid programs. An average lag of 20 months was reported by Grabowski (1988~.
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From page 57... ...
, the VHA reported that 3.45% of prescriptions were filled with nonformulary drugs (DVA, VHA Nonformulary Drug Use Process, 1999~. Although the percentage contributions to expenditures of a number of popular nonformulary drugs in closed or preferred classes are on the FY 1998 list of top 200 dollar-expenditure drugs from the prime vendor (for example, omeprazole, pravastatin, atorvastatin, leuprolide, doxazosin)
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From page 58... ...
In MCOs, on average, 10% of prescriptions are filled with nonformulary drugs (Hoechst Marion Roussel, 1998~. In 1999, the VHA reported that the percentage of nonformulary volume in the VA National Formulary closed classes was between 4 and 6%.
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From page 59... ...
In terms of administrative ease or time to completion, the committee was as concerned that there might be patient care settings with significant delays in response to requests for nonformulary drugs as with average response time. In some cases, the nonformulary process includes review by the facility's P&T committee.
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From page 60... ...
For HMOs, the result of Formulary systems is that 90% of all prescriptions are filled with Formulary drugs (Hoechst Marion Roussell, 1998) , as noted earlier.
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From page 61... ...
Most therapeutic interchange in the VHA has been in closed classes or with a few popular drug products in other classes. These include situations in which there are price differentials, high volume, national contracts or usage criteria, current or former class closures, or VISN as well as national purchase agreements or contracts.
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From page 62... ...
Other surveys find that therapeutic interchange is an accepted practice in managed care that is becoming more prevalent each year. The Hoechst Marion Roussel survey (1998)
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From page 63... ...
On the other hand, there are no national VHA guidelines on therapeutic interchange, and the committee did not find any written policies at the VISN level. Although interchanges may be initiated and specified at either the national, the VISN, or the local level, they are designed and implemented at the local facility level.
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From page 64... ...
It is always important that interchanges may affect a stable drug treatment regimen, and from the veteran's perspective are involuntary and may not be well understood. Lacking national or regional guidance or convincing evidence of a flexible and responsive nonformulary process, therapeutic interchange programs in facilities may appear inconsistent or restrictive to prescribers and patients regardless of where they originate.
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From page 65... ...
These issues are discussed in Chapter 4 of this report and reviewed briefly below. Much of the detail on therapeutic interchange programs and the nonformulary system is at the local level.
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From page 66... ...
Recent data from a subset of PBMs and MCOs surveyed by the AMCP are consistent with low levels of PBM OTC coverage (Table 2.1~. About 12 state Medicaid programs cover very few or no OTC drugs.
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From page 67... ...
Hoechst Marion Roussel (1998) reported that 63.8% of HMOs required generic substitution in 1997 and 43.8% of prescriptions were filled generically.
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From page 68... ...
This survey, in part designed by and wholly financially supported by Pfizer, Inc., found fewer VA physicians very familiar with, and more with negative experiences or perceptions regarding, the National Formulary (Yankelovich Partners, 1999~. The committee noted problems with the RAND study, some of which had also been identified by the VHA.
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From page 69... ...
In any event, the committee concluded that this survey supported taking a closer look at certain aspects of the National Formulary, among them the nonformulary process, therapeutic interchange programs, and the relationship between VISN or local activities and National Formulary policies and procedures. Similar conclusions were reached by the authors of this survey report (Glassman et al., 1999~.
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From page 70... ...
CareData Reports, Inc., in Wilson and Burke, 1999~. Surveys like this and experience from the VHA, in times of rapidly escalating drug costs, indicate that the pharmacy benefit is important to enrollees in managed care and veterans using VA health care (Novartis, 1998~.
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From page 71... ...
They can be found in the Executive Summary of this report, beginning with the overall conclusion that the National Formulary does not meet the committee's definition of overly restrictive. The committee hopes that the information, analyses, conclusions, and recommendations here might also guide policy evaluations by others.
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