From: Bruhnsen, Keith

To: E-OHPSCA1251.EBSA

Subject: Comment on Formulary

Date: Thursday, July 15, 2010 2:08:38 PM

Attachments: Formulary comment July 2 2010.docx

I would like to submitted the attached formulary comment.
We are a large public employer whose pharmacy benefit was carved out 

from its medical benefit plans to create a self-insured and self-administered 

prescription drug benefit plan. The drug plan is offered to over 90,000 

employees, retirees, and dependents. It is administered by one pharmacy 

benefit manager and managed by an internal benefit administration team. In 

2009 total drug plan and member cost exceeded $79 million dollars and 

more than 900,000 prescriptions were dispensed. 

Several improvements were achieved through the new plan design including: 

 Unified pharmacy benefits for all members regardless of medical plan 

enrollment 

 Expanded coverage options 

 Management of an open formulary using evidence-based decision 

making 

 Increased cost-effectiveness 

 Use of three-tiered copay plan design to incent use of generic and 

preferred branded drugs. 

Organization Drug Plan Management: 

The drug formulary is managed by an internal advisory committee 

comprised of health care professionals and benefit administrators that 

regularly review the plan’s preferred drug list and recommend clinical 

management strategies for appropriate prescribing and dispensing practices. 

The committee also evaluates additional benefit design strategies to promote 

cost-effective medication use. Currently, without any mandatory generic use 

programs, the use of generic medications is at 76% of total drugs dispensed. 

This exceeds national generic dispensing rates, and is attributable to the selfinsured, self-administered nature of our pharmacy plan design. 

A major plan objective is to provide outpatient prescription drugs for 

appropriate use. The plan has exerted greater authority over design of its 

formulary and preferred drug list to encourage use of “best value” drugs 

based on available evidence and avoid overuse, misuse and/or abuse. This is 

accomplished through a host of utilization management programs that 

include drug approval for preferred status, prior authorizations, step 

therapies, quality and supply limits and other programs that provide 

incentives to members to use preferred brand and generic medications which 

are the lowest costs to members. As a result, we have successfully managed 
prescription drug costs resulting in annual plan cost trend rates far below the 

national averages. From 2003 to 2010, we estimate total plan savings at 

over $30 million dollars. 

The drug formulary is a continually updated list of prescription medication 

guided by experts and enhances quality of care by encouraging use of safe 

and the most effective medications. Studies show the choice of the most 

appropriate drug results in fewer treatment failures, reduced hospitalizations, 

better patient adherence to their treatment plan, few adverse side effects and 

better overall outcomes. Nationally professional managed care pharmacy 

groups support and provide guidance on the benefits and management for 

best practices in drug formulary. 

Organization Philosophy on Control of the Formulary: 

Central to our success has been the ability to control formulary and the 

flexibility to evaluate drug classes and preferred products as market changes 

develop. Changes to formulary under the Affordable Care Act should 

permit drug plans to make routine changes to its formulary and preferred 

drug list, including adding new drugs or elimination of drugs that offer no 

superior clinical advantage over existing drugs within a drug class; preferred 

drug status within drug classes; changes in drug indications based upon FDA 

labeling; and utilization management programs (i.e., prior authorization, step 

therapy, quantity limits and supplies) to control appropriate use. These types 

of regular changes to formulary are necessary to maintain best value, 

appropriate prescribing and member use, and manage cost. Changes to 

formulary should not be permitted that completely eliminate a drug class; 

have no preferred products within a drug class; or create utilization 

restrictions not based on credible clinical evidence, nationally recognized 

compendia, studies published in peer reviewed journals and FDA labeling. 

Standard exclusions in formulary (e.g., cosmetic, anorexiants, experimental 

drugs without FDA approval) should be permitted. Plans should be 

permitted to change formulary and conduct pilot or research programs that 

test its effectiveness, quality of care, and cost management. 

Opinion on Regulations Governing Formulary Changes: 

It is our opinion that having control over formulary decisions not only 

increases physician and member acceptance, but also improves the quality of 

the plan for members and mitigates increased health care cost. If changes to 
the formulary are considered a trigger for the loss of grandfather plan status, 

this will be detrimental to our plan and the members it serves, as plan costs 

will increase in order to comply with PPACA requirements for nongrandfather plans. We support giving group health plans the flexibility to 

make formulary changes that are evidence-based without loss of grandfather 

status.