Management of Drug Formulary Dimitry Gotlinsky Western University Managed Care Clerkship ProPharma Pharmaceutical Consultants, Inc. 06/16/06

Drug Formulary A drug formulary is a preferred list of medications developed by health care professionals A drug formulary is a preferred list of medications developed by health care professionals Promotes high quality medical care that is affordable for patients Promotes high quality medical care that is affordable for patients Features a continually revised list of prescription medications Features a continually revised list of prescription medications

The Formulary System Provides drug product selection and formulary maintenance Provides drug product selection and formulary maintenance Drug utilization review Drug utilization review Periodic evaluation and analysis of treatment protocols and procedures Periodic evaluation and analysis of treatment protocols and procedures Monitoring, reporting, and analysis of adverse results of drug therapy Monitoring, reporting, and analysis of adverse results of drug therapy

Techniques of Formulary System Management 3 general categories 3 general categories a) Drug use evaluation a) Drug use evaluation b) Formulary maintenance b) Formulary maintenance c) Drug product selection c) Drug product selection

Drug Use Evaluation Diagnosis criteria Diagnosis criteria Prescriber criteria Prescriber criteria Drug-specific criteria Drug-specific criteria

Formulary Maintenance Therapeutic drug class review Therapeutic drug class review Formulary addition or deletion Formulary addition or deletion Use of non-formulary drugs Use of non-formulary drugs

Drug Product Selection Generic substitution Generic substitution Therapeutic Interchange Therapeutic Interchange

How are Formularies Chosen? Not all drugs are created equal Not all drugs are created equal Safety and efficacy are the 2 most important aspects of choosing a formulary Safety and efficacy are the 2 most important aspects of choosing a formulary Based on recommendations of Pharmacy & Therapeutics Committee Based on recommendations of Pharmacy & Therapeutics Committee

Members of P & T Committee Physicians Physicians Pharmacists Pharmacists Nurses Nurses Administrators Administrators Quality assurance coordinators Quality assurance coordinators Epidemiologists/specialists Epidemiologists/specialists Ethicists Ethicists

P & T Committee Duties Appraises, evaluates, and selects drugs for the formulary Appraises, evaluates, and selects drugs for the formulary Meets as frequently as is necessary to review and update the formulary Meets as frequently as is necessary to review and update the formulary Oversees quality improvement programs that employ drug use evaluation Oversees quality improvement programs that employ drug use evaluation Implement generic substitution and therapeutic interchange Implement generic substitution and therapeutic interchange Develops protocols and procedures for the use of non- formulary drugs Develops protocols and procedures for the use of non- formulary drugs

Types of Formularies Open Open - greatest level of flexibility - greatest level of flexibility - typically 2-tiered benefit design - typically 2-tiered benefit design Multi-tier Multi-tier -provides for a high level of flexibility -provides for a high level of flexibility -most of the time utilizes 3-tier benefit design, but can -most of the time utilizes 3-tier benefit design, but can more more Closed Closed -least level of flexibility -least level of flexibility -involves use of NDC blocks and prior authorizations -involves use of NDC blocks and prior authorizations

Cost of Medications Cost is just one of many factors that plays a role Cost is just one of many factors that plays a role Basing formulary system decisions on cost factors is secondary Basing formulary system decisions on cost factors is secondary First priority is to establish safety, efficacy, and therapeutic need First priority is to establish safety, efficacy, and therapeutic need Lower cost drug for the same condition does not get automatically picked Lower cost drug for the same condition does not get automatically picked

Non-Formularies The formulary system should: The formulary system should: a) enable individual patients needs to be met with non-formulary drug products a) enable individual patients needs to be met with non-formulary drug products b) provide access to a formal appeal process if a request for a non-formulary drug is denied b) provide access to a formal appeal process if a request for a non-formulary drug is denied c) institute an efficient process for the timely obtaining of non-formulary drug products c) institute an efficient process for the timely obtaining of non-formulary drug products d) include policies that state that practitioners should not be penalized for prescribing non- formulary drugs

Good Formulary System Informative Informative Proactively inform practitioners about changes to the formulary Proactively inform practitioners about changes to the formulary Disclose the existence of formularies Disclose the existence of formularies Provide rationale for specific formulary decisions when requested Provide rationale for specific formulary decisions when requested Provide patient education programs Provide patient education programs

AMCP Health care systems frequently conduct formulary decision-making under uncertain conditions Health care systems frequently conduct formulary decision-making under uncertain conditions Needed a standardized approach to support product evaluation and selection with clinical outcomes as the most important consideration Needed a standardized approach to support product evaluation and selection with clinical outcomes as the most important consideration Approved a set of guidelines for MCOs to use when considering drugs for inclusion in formularies Approved a set of guidelines for MCOs to use when considering drugs for inclusion in formularies

AMCP Format Allow a health system and its P&T committee to determine: Allow a health system and its P&T committee to determine: a) clinical benefits a) clinical benefits b) risks b) risks c) evaluate value c) evaluate value d) determine overall cost consequences d) determine overall cost consequences to their health system to their health system

AMCP Guideline Goals Establish a comprehensive, standardized, evidence-based process for evaluation of clinical and economic data Establish a comprehensive, standardized, evidence-based process for evaluation of clinical and economic data Provide manufacturers with a consistent format for providing necessary information Provide manufacturers with a consistent format for providing necessary information Improve the timeliness, quality and relevance of information available to P&T committees Improve the timeliness, quality and relevance of information available to P&T committees

AMCP Dossier Content Approved and off-label indications Approved and off-label indications PK and PD PK and PD Dose and Duration Dose and Duration Safety Information Safety Information Key economic study results Key economic study results Economic evaluation support data Economic evaluation support data Demographics Demographics

In Conclusion American public is unwilling to accept limits on the use of health care services American public is unwilling to accept limits on the use of health care services Major factor contributing to resistance of cost- effectiveness analysis Major factor contributing to resistance of cost- effectiveness analysis AMCP format will help health systems establish a rational evidence-based decision making AMCP format will help health systems establish a rational evidence-based decision making As a result will gain the confidence and trust of patients as well as clinicians, payers and members As a result will gain the confidence and trust of patients as well as clinicians, payers and members

Questions? Questions?