# Presentation: 692349

## Joseph J. Canzolino, R.Ph.             

***Formulary Management in the***
***Department of Veterans Affairs***
- _[www.pbm.va.gov](http://www.pbm.va.gov/)_

## VA PROFILE

- VA (think staff model HMO)
- Comprehensive health care system
- Direct provider of care
- Providers are employees
- Infrastructure is owned and operated by VA
- Prescription benefit and benefit management is _integrated into VA’s comprehensive medical care delivery system_, not added-on or contracted-out
- Prescription fulfillment
- 223 ambulatory care pharmacies (community pharmacy model)
- 7 home delivery pharmacies (modified commercial mail order model)
- Formulary management
- Formulary design
- Evidence-based prescribing guidance
- Contracting
- Utilization review

## VA PROFILE (continued...)

- Patient safety
- VAMedSafe
- ADE reporting and analysis
- Post marketing surveillance
- 2006 numbers
- 4.4 million VA pharmacy users
- 120 million outpatient prescriptions
- 92 million via mail order
- 28 million via medical care facility pharmacies
- $3.4 billion on outpatient drug expenditures
- Cost per RX nearly flat for last 7 years
- Cost low for population
- ~ 5,800 pharmacists and 3,800 pharmacy technicians
- Clinical pharmacist specialists (~ 1,600; expanded role as physician extender)
- Approximately 400 Board Certified

## FORMULARY MANAGEMENT

## Formulary Management: Not Just Cost!

- Consider outcomes, safety information
- May lead to recommendations to provide more expensive drug therapies
- Examples:
- Cerivastatin
- Delay in rosuvastatin
- Age Related Macular Degeneration Therapies (ranibizumab vs bevacizumab)

## KEY OBJECTIVES OF  THE VA FORMULARY PROCESS

**KEY OBJECTIVES OF  THE VA FORMULARY PROCESS**

- Promote **appropriate drug therapy** and discourage inappropriate drug therapy
- Reduce the geographic **variability in utilization **of pharmaceuticals across the VA system
- Initiate patient **safety **improvements
- Improve the **distribution** of pharmaceuticals
- Reduce **inventory** carrying costs, **drug acquisition** costs and the **overall** cost of care
- Promote **portability and uniformity** of the drug benefit
- Design and carry out relevant **outcomes assessment** projects

## STRATEGIES

**STRATEGIES**

**Physician / pharmacist buy-in **
- Before formulary decisions are made and implemented, each VA clinician has an opportunity to provide input (on drug class reviews, algorithms, criteria for use guidance, VA national formulary initiatives, etc.)
- Due to up front buy-in and evidentiary basis of reviews, contract adherence for “closed” classes is rapid and extensive.  Adherence can reach 90% in 3 months and >98% within 6 months
- Non-formulary drug use is approximately 5% across VA

## Using EBM to Guide Formulary Management- Drug Monographs

- Efficacy
- Safety
- Cost-Effectiveness
- Other Factors

## Efficacy

- Clinically relevant outcomes
- Ex: ACEI therapy for CHF
- High quality, well designed clinical trials
- Robust evidence
- Ex: Statin therapy for CAD
- Clinical populations similar to our patient population
- VA studies carry special significance
- Ex: VA-HIT

## Safety

- Clinical trials safety profiles
- Post-marketing surveillance safety profile
- Clinical populations similar to our patient population
- VA studies carry special significance
- VA PBM drug safety evaluations

## Cost Effectiveness

- More important when efficacy and safety profiles are similar
- Independent CEAs preferred over industry analyses
- Appropriate costs relevant to VA
- Appropriate comparator to get relevant incremental cost-effectiveness

## In Summary: Evidence-Based Formulary Management

- Evidence informs decisions
- Use to justify increased drug acquisition costs
- Use to justify conservative approach to drugs with limited or inadequate evidence to support use
- Use to assess VA specific data as new questions about drug safety or efficacy arise

## NON-FORMULARY DRUG USE

- Prescribing guidance (evidence-based Criteria for Use) for non-formulary drugs is developed to ensure access to medically necessary drugs not listed on VANF.  For illustration, in 2006 VA dispensed prescriptions for the following non-formulary drugs:

| DRUG | Number of 30-day RXs | Cost |
| --- | --- | --- |
| Flomax® | 752,924 | $ 23 million |
| Lipitor® | 711,138 | $ 34 million |
| Zetia® | 369,783 | $ 15 million |
| Protonix® | 366,375 | $ 13 million |
| Ambien® | 193,418 | $  9 million |
| Crestor® | 144,341 | $   3 million |

## CLINICALLY DRIVEN STANDARDIZATION CONTRACTING

## BROAD OBJECTIVES OF STANDARDIZATION CONTRACTING

**BROAD OBJECTIVES OF STANDARDIZATION CONTRACTING**

- Lower Cost with Same Outcomes
- 				*or, better still...*
- Same Cost with Better Outcomes
- 				*or, best....*
- Lower Cost with Better Outcomes

## START

- RX volume
- RX expenditures
- New Drugs

**ID areas of opportunity**

- Review:
- Medical Literature
- VA Prescribing
- Clinical Need

**Assess feasibility**

**Present issue to stakeholders**

- Medical Advisory Panel (MAP)
- VISN Formulary Leaders (VFLs)
- Get input from front
-   line clinical staff
- Chief Clinical Consultants
- DoD
- Pharmacoeconomic Center
- P & T Committee

**Determine action(s)**

- Nothing
- One or more of:
- Guideline
- Criteria for Use
- National Contract
- Incentive Agreement

**Implement action(s)**

- One or more of:
- Issue Drug Use Criteria
- Conduct Solicitation
- Negotiate BPA

**Monitor Performance**

- Contract Participation
- Utilization Management
- Use of Criteria

_***PBM-MAP Drug Use Management Process***_

**START**

## Proposed Contracts

| BISOPROLOL TAB |
| --- |
| BRIMONIDINE OPHTH SOLN 0.2% |
| CARVEDILOL TAB |
| CHOLINESTERASE INHIBITORS |
| CITALOPRAM TAB |
| DOXAZOSIN TAB |
| FENTENYL PATCHES |
| FEXOFENADINE TAB |
| FOSINOPRIL TAB |
| GABAPENTIN CAP |
| GLIPIZIDE SA |
| GLYBURIDE/METFORMIN |

| HALOPERIDOL TAB |
| --- |
| HYDRALAZINE TAB |
| LABETALOL TAB |
| MECLIZINE TAB |
| MEGESTROL SUSP |
| NIFEDIPINE LA |
| OAB DRUGS |
| OXYBUTYNIN TAB |
| PAROXETINE TAB |
| SERTRALINE TAB |
| TABLET SPLITTERS |
| TERBINAFINE TAB |

## END

**END**