56312 Federal Register / Vol. 79, No. 182 / Friday, September 19, 2014 / Proposed Rules 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 2. Section 1.402A–1 is amended 

by adding a sentence after the third 

sentence of paragraph A–5. (a) to read 

as follows: 

§ 1.402A–1 Designated Roth Accounts. 

* * * * * 

A–5. (a) * * * The preceding 

sentence does not apply to distributions 

made on or after January 1, 2015; in 

addition, a taxpayer may elect not to 

apply the preceding sentence to 

distributions made on or after an earlier 

date that is no earlier than September 

18, 2014. * * * 

* * * * * 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2014–22324 Filed 9–18–14; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[Docket ID: DOD–2012–HA–0049] 

RIN 0720–AB57 

Civilian Health and Medical Program of 

the Uniformed Services (CHAMPUS)/

TRICARE: TRICARE Pharmacy 

Benefits Program 

AGENCY: Office of the Secretary, 

Department of Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement new authority authorizing an 

over-the-counter (OTC) drug program, 

make several administrative changes to 

the TRICARE Pharmacy Benefits 

Program regulation in order to conform 

it more closely to the statute, and clarify 

some procedures regarding the 

operation of the uniform formulary. 

Specifically, the proposed rule would: 

provide implementing regulations for 

the OTC drug program that has recently 

been given permanent statutory 

authority; conform the pharmacy 

program regulation to the statute 

regarding point-of-service availability of 

non-formulary drugs and copayments 

for all categories of drugs; clarify the 

process for formulary placement of 

newly approved drugs; and clarify 

several other uniform formulary 

practices. 

DATES: Written comments received at 

the address indicated below by 

November 18, 2014 will be considered 

and addressed in the final rule. 

ADDRESSES: You may submit comments, 

identified by docket number and/or RIN 

number and title, by any of the 

following methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Mail: Federal Docket Management 

System Office, 4800 Mark Center Drive, 

East Tower, Suite 02G09, Alexandria, 

VA 22350–3100. 

Instructions: All submissions received 

must include the agency name and 

docket number or Regulatory 

Information Number (RIN) for this 

Federal Register document. The general 

policy for comments and other 

submissions from members of the public 

is to make these submissions available 

for public viewing on the Internet at 

http://www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: Dr. 

George E. Jones, Jr., Chief, Pharmacy 

Operations Division, Defense Health 

Agency, telephone 703–681–2890. 

SUPPLEMENTARY INFORMATION: 

A. Executive Summary 

1. Purpose of the Proposed Rule 

The purpose of this proposed rule is 

to incorporate new statutory authority 

for a permanent OTC program, make 

several administrative changes to the 

TRICARE Pharmacy Benefits Program 

regulation to conform more closely to 

the statute (10 U.S.C. 1074g), and clarify 

some procedures regarding the uniform 

formulary. 

The legal authority for this proposed 

rule is 10 U.S.C. 1074g. 

2. Summary of the Major Provisions of 

the Proposed Rule 

a. It would establish the process for 

identifying select OTC products for 

coverage under the pharmacy benefit 

program and the rules for making these 

products available to eligible DoD 

beneficiaries under the new authority 

enacted in section 702 of the National 

Defense Authorization Act for Fiscal 

Year 2013 (NDAA–13). In general, 

approved OTC pharmaceuticals will 

comply with the mandatory generic 

policy as stated in CFR 199.21(j)(2) and 

will be available under terms similar to 

generic prescription medications, except 

that the need for a prescription and/or 

a copay may be waived in some 

circumstances. 

b. It would conform the regulation to 

the statute regarding the number of 

points of service where non-formulary 

drugs are required to be available. They 

would be generally available in the 

retail program and the mail order 

program unless the Pharmacy and 

Therapeutics Committee recommends 

limiting the drug to a single point of 

service—retail or mail order—based on 

determinations that there is no 

significant clinical need and there is a 

significant additional government cost 

for access in both, and the 

recommendation is approved by the 

Director, Defense Health Agency (DHA). 

c. It would clarify the process for 

formulary placement of newly approved 

innovator drugs brought to market 

under a New Drug Application 

approved by the Food and Drug 

Administration (FDA), giving the 

Pharmacy and Therapeutics Committee 

up to 120 days to recommend tier 

placement on the uniform formulary. 

During this period, new drugs would be 

assigned a classification pending status; 

they would be available in retail and 

mail order under terms comparable to 

non-formulary drugs. 

d. As a ‘‘housekeeping’’ change, it 

would conform the rule to the new 

statutory specifications for copayment 

amounts under section 712 of NDAA– 

13. 

3. Costs and Benefits 

The benefits of the proposed rule are 

that it will more closely conform the 

regulation to the statute and facilitate 

more effective administration of the 

TRICARE Pharmacy Benefits Program. 

The proposed rule will provide savings 

to the Department of a low-end estimate 

of $18.4 million and the high-end 

estimate of $26 million per year. 

B. Background 

In 1999, Congress enacted 10 U.S.C. 

1074g to, among other things, establish 

a uniform formulary program to 

incentivize the use of more costeffective pharmaceutical agents and 

points of service. There are four points 

of service under the Pharmacy Benefits 

Program—military facility pharmacies, 

retail network pharmacies, retail nonnetwork pharmacies, and the TRICARE 

mail order pharmacy program (TMOP)— 

and three uniform formulary tiers—First 

Tier for generic drugs, Second Tier for 

preferred brand name drugs (also 

referred to as ‘‘formulary drugs’’), and 

Third Tier for non-preferred brand name 

drugs (also referred to as ‘‘nonformulary drugs’’). In addition to 

establishing procedures for assigning 

drugs to one of the three tiers, the 

statute includes several other 


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specifications, such as: That formulary 

drugs are generally available in all three 

points of service; and that nonformulary drugs are available in at least 

one point of service. TRICARE’s 

regulations implementing this statute, 

issued in 2004, established or continued 

prior rules for, among other things: 

Assigning drugs to a formulary tier 

based on clinical and cost-effectiveness, 

and point of service availability for the 

respective tiers. Although the statute 

required Third Tier drugs to be available 

in only one point of service, the 

regulations made them available in two. 

TRICARE’s administration of the 

Pharmacy Benefits Program has 

achieved some improvements in costeffectiveness through the retail refund 

program, increased utilization of 

formulary management tools such as 

step-therapy and prior authorizations, 

and increased copays. The proposed 

rule will provide savings to the 

Department of a low-end estimate of 

$18.4 million and the high-end estimate 

of $26 million per year based on a 

combination of the savings from the 

current OTC demonstration program 

and estimated potential savings 

resulting from being able to offer nonformulary drugs through the most costeffective venue. However, overall costs 

of the TRICARE Pharmacy Benefits 

Program have continued to increase 

substantially, from approximately $2 

billion in fiscal year 2001, to 

approximately $7 billion for fiscal year 

2012. Like other large health plans, DoD 

is experiencing rising pharmacy costs 

due to new expensive products, shorter 

hospital stays, and in some cases higher 

drug prices. DoD also has an expanded 

beneficiary population, which now 

includes ‘‘TRICARE-for-Life’’ 

beneficiaries and some members of the 

Selected Reserves and their families. 

Retail prescription co-payments reflect 

the cost for up to a 30-day supply of the 

prescription, while mail order copayments cover up to a 90-day supply. 

This difference is part of the incentive 

for beneficiaries to use the more costeffective mail order program, as is the 

recent elimination of copayments for 

mail order generic drugs. Encouraging 

increased use of DoD’s more costeffective points of service (i.e., the mail 

order pharmacy or a military treatment 

facility pharmacy) and more costeffective pharmaceutical products (i.e., 

those on First Tier and Second Tier) 

continues to be a TRICARE program 

objective. 

C. Provisions of the Proposed Rule 

The proposed rule would establish 

the process for selecting OTC products 

for coverage under the TRICARE 

pharmacy benefit program and would 

provide the guidelines for making 

selected OTC products available to 

eligible DoD beneficiaries. The OTC 

drugs demonstration project began 

through the TRICARE Mail Order 

Pharmacy program in May 2007 and in 

the TRICARE Retail Pharmacy program 

in October 2007. Due to the brevity of 

the demonstration, particularly in the 

retail pharmacy venue, in June 2009 an 

interim report to Congress was 

submitted with preliminary cost savings 

estimates and positive beneficiary 

feedback. In order to validate the initial 

results and identify areas for 

improvement to the program, the 

Department of Defense (DoD) extended 

the program through a Federal Register 

notice published on December 16, 2009. 

The demonstration program was due to 

terminate November 4, 2012. The DoD 

extended the OTC demonstration for 

another 2 years through publishing a 

Federal Register notice, while awaiting 

permanent legislative authority. A 

report to Congress in 2012 stated that 

DoD saved approximately $62M during 

the course of the OTC demo. Section 

702 of NDAA–13 amended subsection 

(a)(2) of section 1074g of title 10, United 

States Code, providing permanent 

authority to place selected over-thecounter drugs on the uniform formulary. 

The new legislation authorizes DoD to 

place selected OTC drugs on the 

uniform formulary and make such drugs 

available to eligible covered 

beneficiaries (eligibility specified in 32 

CFR 199.3). The basic criteria regarding 

selection of OTC products for 

consideration is cost-effectiveness and 

patient access. DoD will consider and 

approve an OTC drug for inclusion 

under this proposal only if it is expected 

to reduce government costs relative to a 

clinically comparable alternative drug 

that would otherwise be consumed and/ 

or if an OTC product provided access to 

care not otherwise met by prescriptiononly products (e.g., Plan B 

contraceptive). An OTC drug may be 

included on the uniform formulary only 

if the Pharmacy and Therapeutics (P&T) 

Committee finds that the OTC drug is 

both cost effective and clinically 

effective. Clinical effectiveness is judged 

by the criteria found in 32 CFR 

199.21(e)(1)(i–ii) while cost 

effectiveness is determined based on 

criteria found in 32 C.F.R. 199.21(e)(2). 

This cost-effectiveness standard is 

reinforced by the requirement for 

physician supervision through issuance 

of a prescription for the OTC drug. This 

requirement applies unless it is waived 

based on a recommendation of the 

Pharmacy and Therapeutics Committee 

for the use of the drug for certain 

medical situations, such as emergency 

care treatment. 

The selected OTC drugs would be 

placed in First Tier with the 

corresponding copays applicable to the 

point-of-service involved (i.e., $0.00 in 

military facilities and mail order, $5.00 

in the retail network). Alternatively, 

based on the recommendation of the 

Pharmacy and Therapeutics Committee 

and approval of the Director, DHA, the 

retail copay may be waived and a $0.00 

copay established for the particular OTC 

drug in all points of service. No cost 

sharing is required at any of the three 

points of service for a uniformed service 

member on active duty. 

Another purpose of this proposed rule 

is to make several administrative 

changes to the TRICARE Pharmacy 

Benefits Program regulation to conform 

more closely to the statute (10 U.S.C. 

1074g) and to clarify some procedures 

regarding the uniform formulary. One 

change is to align the regulation with 

the statute regarding the number of 

points of service where non-formulary 

drugs are required to be available. The 

statute requires availability in one of the 

three primary points of service (military 

facility, retail network, and mail order 

program); the current regulation 

specifies that non-formulary (Third 

Tier) drugs are generally unavailable in 

military facilities and generally 

available in the retail network and by 

mail order. The proposed rule, by 

contrast, states that non-formulary drugs 

are generally required to be available in 

the retail program and the mail order 

program. This requirement applies 

unless the Pharmacy and Therapeutics 

Committee recommends limiting the 

drug to only one venue based on 

determinations that there is no 

significant clinical need and there is a 

significant additional government cost 

for access at all venues, and the 

recommendation is approved by the 

Director, Defense Health Agency (DHA). 

In this context, clinical need means 

there are reasons in the course of 

clinical care that the non-formulary 

drug is required over other, preferred, 

formulary drugs. A finding of clinical 

need also means that limiting access to 

one point of service would affect the 

ability to deliver prompt, appropriate 

medical care, for example timing of 

therapy or use of the drug for acute care 

indications, among other concerns. This 

change would reinforce DoD policy, 

which encourages use of more costeffective drugs and points of service. A 

beneficiary always has the option of 

asking the health care provider to 

change the prescription to a comparable 

formulary drug, or, in cases of medical 


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necessity, obtaining approval for 

dispensing the non-formulary drug at 

the formulary copayment amount. Like 

all other health plans with formularies, 

physicians make professional decisions 

regarding formulary alternatives, often 

in consultation with the pharmacist in 

light of the individual patient’s 

circumstances. Under DOD’s policy, 

when a physician provides written 

justification stating why the nonpreferred drug is expected to have better 

clinical outcomes than the preferred 

drug, the non-formulary drug may be 

obtained at the formulary copay. This 

process is clearly explained to the 

provider by the Pharmacy Benefit 

manager through telephone or fax when 

the situation occurs. Another option for 

most prescriptions when the beneficiary 

prefers a non-formulary drug is to have 

the prescription transferred to the mail 

order program, which has lower copayments for non-formulary drugs than 

the retail point of service. 

Another administrative change would 

clarify the process for formulary 

placement of innovator drugs newly 

approved by the Food and Drug 

Administration. Current practice for 

brand name drugs is that they are placed 

in the Second Tier the day FDA 

approves the drug. This practice has not 

led to the most cost-effective placement 

of these newly approved drugs and has 

the potential for confusion among 

patients and physicians if the drug is 

soon thereafter moved to Third Tier. 

DoD proposes that newly approved 

drugs be evaluated for their relative 

clinical benefit and relative cost, as 

compared to other drugs in the same 

class, at the next quarterly meeting of 

the Pharmacy and Therapeutics (P&T) 

Committee following FDA approval. A 

recommendation will then be made to 

the Director of the TRICARE 

Management Activity for tier placement 

of the drug. 

The current regulation does not 

specifically address the status of the 

drug from the date of FDA approval to 

the date the P&T Committee’s 

recommendation is eventually 

implemented. The proposed rule would 

address this by considering the newly 

approved drug to be in a classification 

pending status and covered by TRICARE 

under terms applicable to Third Tier 

drugs, and by providing a period of up 

to 120 days for the P&T Committee to 

make a final determination with respect 

to formulary classification. Tier 

classification will normally occur at the 

next quarterly meeting following FDA 

approval, but in cases when the FDA 

approval happens too close to a 

scheduled meeting for the necessary 

research to be done, the drug would be 

considered at the following meeting. 

The 120-day time period accommodates 

this. During the period prior to a 

decision on tier placement, the newly 

approved drug will be covered by 

TRICARE under Third Tier terms. 

Under the current rule, new drugs are 

immediately placed on the Second Tier 

(formulary brand-name drugs). Once the 

new drug is properly reviewed and 

compared to all other drugs in its class, 

it is often moved to the Third Tier (nonformulary), i.e., no clinical or cost 

advantage. Under the proposed rule, 

very briefly deferring tier placement 

pending a review would not require a 

‘‘tier move’’ if the review finds no 

clinical or cost advantage. Movement of 

drugs between the tiers is always 

confusing to beneficiaries even though 

they are notified in writing of the 

change. The proposed change to the rule 

will lessen the likelihood of a tier move 

for the new product. 

The proposed rule would also 

incorporate into the regulation several 

details of current practice. While the 

current regulation provides that a 

uniform formulary drug that is not a 

generic drug may be grouped for 

copayment purposes with generic drugs 

if it is judged to be as cost effective as 

generic drugs in the same drug class, the 

proposed rule would add that a generic 

drug may be classified as non-formulary 

if it is less cost-effective than nongeneric formulary drugs in the same 

drug class. The Uniform Formulary 

process requires the P&T committee to 

make recommendations to the Director, 

Defense Health Agency who approves or 

disapproves each recommendation after 

reviewing comments from the 

Beneficiary Advisory Panel on the 

recommendations. In the case of all 

generic drugs, the beneficiary 

copayment amount for any prescription 

may not exceed the total charge to 

TRICARE for that prescription. 

Finally, the proposed rule would 

make a ‘‘housekeeping’’ change to the 

paragraph on cost sharing amounts to 

make it conform to the current statutory 

specifications established by NDAA–13. 

In the current regulation, copays were 

calculated based on the previous statute 

that stated that the Third Tier copay 

could be no more than 20% for active 

duty dependents or 25% for retirees and 

their dependents of the cost of the drug. 

The NDAA–13 legislation provided 

specific set dollar amounts for copays 

from January 2014 through January 

2023. This has rendered the text of the 

current regulation out of date and no 

longer accurate. The new proposed text 

of the regulation matches the current 

statutory specifications. The proposed 

rule also reissues without change 

paragraphs (h)(4) and (i)(2)(ii)(D) to 

clarify agency intent and correct a 

technical misstatement in a 2011 

Federal Register publication. 

D. Regulatory Procedures 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review’’ 

Executive Order (EO) 12866 and 

13563 require that a comprehensive 

regulatory impact analysis be performed 

on any economically significant 

regulatory action, defined primarily as 

one that would result in an effect of 

$100 million or more in any one year. 

The DoD has examined the economic, 

legal, and policy implications of this 

proposed rule and has concluded that it 

is not an economically significant 

regulatory action under Section 3(f)(1) 

of the EO. The rule is a significant 

regulatory action and it has been 

reviewed by the Office of Management 

and Budget. 

Congressional Review Act, 5 U.S.C. 

§ 801, et seq. 

Under the Congressional Review Act, 

a major rule may not take effect until at 

least 60 days after submission to 

Congress of a report regarding the rule. 

A major rule is one that would have an 

annual effect on the economy of $100 

million or more or have certain other 

impacts. This proposed rule is a not a 

major rule under the Congressional 

Review Act. 

Sec. 202, Public Law 104–4, ‘‘Unfunded 

Mandates Reform Act’’ 

This rule does not contain a Federal 

mandate that may result in the 

expenditure by State, local and tribunal 

governments, in aggregate, or by the 

private sector, of $100 million or more 

(adjusted for inflation) in any one year. 

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (5 U.S.C. 601) 

The Regulatory Flexibility Act (RFA) 

requires that each Federal agency 

prepare and make available for public 

comment, a regulatory flexibility 

analysis when the agency issues a 

regulation which would have a 

significant impact on a substantial 

number of small entities. This proposed 

rule does not have a significant impact 

on a substantial number of small 

entities. 

Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

This proposed rule contains no new 

information collection requirements 

subject to the Paperwork Reduction Act 

(PRA) of 1995 (44 U.S.C. 3501–3511). 


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Federal Register / Vol. 79, No. 182 / Friday, September 19, 2014 / Proposed Rules 56315 

Executive Order 13132, ‘‘Federalism’’ 

This proposed rule does not have 

federalism implications, as set forth in 

Executive Order 13132. This rule does 

not have substantial direct effects on the 

States; the relationship between the 

National Government and the States; or 

the distribution of power and 

responsibilities among the various 

levels of Government. 

Public Comments Invited 

This is a proposed rule. DoD invites 

public comments on all of its 

provisions. 

List of Subjects in 32 CFR Part 199 

Claims, Health care, Health insurance, 

Military personnel, Pharmacy Benefits. 

Accordingly, 32 CFR part 199 is 

proposed to be amended as follows: 

PART 199—[AMENDED] 

■ 1. The authority citation for part 199 

continues to read as follows: 

Authority: 5 U.S.C. 301; 10 U.S.C. chapter 

55. 

■ 2. Section 199.21 is amended by: 

■ a. Adding new paragraphs (b)(3) and 

(g)(5), (h)(5), (i)(2)(xii) and (j)(4) and (5), 

■ b. Revising paragraphs (h)(3)(i) and 

(ii), (i)(2)(ii) through (v), and (i)(2)(x), 

and 

■ c. Republishing paragraph (h)(4) 

without change. 

The additions and revisions read as 

follows: 

§ 199.21. Pharmacy Benefits Program. 

* * * * * 

(b)* * * 

(3) Over-the-counter drug. A drug that 

is not subject to section 503(b)(1) of the 

Federal Food, Drug, and Cosmetic Act 

(21 U.S.C. 353(b)(1)). 

* * * * * 

(g) * * * 

(5) Administrative procedure for 

newly approved drugs. In the case of a 

newly approved innovator drug, other 

than a generic drug, the innovator drug 

will, not later than 120 days after the 

date of approval by the Food and Drug 

Administration, be added to the uniform 

formulary unless prior to that date the 

P&T Committee has recommended that 

the agent be listed as a non-formulary 

drug. If the Director, DHA subsequently 

approves that recommendation, the drug 

will be so listed. If the Director, DHA 

disapproves the recommendation to list 

the drug as non-formulary Third Tier, 

the drug will be then classified per the 

Director’s decision. If, prior to the 

expiration of 120 days, the P&T 

Committee recommends that the agent 

be added to the uniform formulary and 

the recommendation is approved by the 

Director, DHA, that will be done as soon 

as feasible. Pending action under this 

paragraph (5), the newly approved 

pharmaceutical agent will be considered 

to be in a classification pending status 

and will be available to beneficiaries 

under Third Tier terms applicable to all 

other non-formulary agents. 

* * * * * 

(h) * * * 

(3) Availability of non-formulary 

pharmaceutical agents.—(i) General. 

Non-formulary pharmaceutical agents 

are generally not available in military 

treatment facilities. They are generally 

available in the retail program and the 

mail order program unless the Pharmacy 

and Therapeutics Committee 

recommends limiting a particular nonformulary drug to only one of these 

points of service based on 

determinations that there is no 

significant clinical need and there is a 

significant additional government cost 

for access in both, and the 

recommendation is approved by the 

Director, DHA. Clinical need is judged 

by the criteria found in paragraph 

(e)(1)(i–ii) of this section. Cost 

effectiveness is determined based on 

criteria found in paragraph (e)(2) of this 

section. 

(ii) Availability of non-formulary 

pharmaceutical agents at military 

treatment facilities. Even when 

particular non-formulary agents are not 

generally available at military treatment 

facilities, they will be made available to 

eligible covered beneficiaries through 

the non-formulary special approval 

process as noted in paragraph (h)(3)(ii) 

of this section when there is a valid 

medical necessity for use of the nonformulary pharmaceutical agent. 

* * * * * 

(4) Availability of vaccines/

immunizations. A retail network 

pharmacy may be an authorized 

provider under the Pharmacy Benefits 

Program when functioning within the 

scope of its state laws to provide 

authorized vaccines/immunizations to 

an eligible beneficiary. The Pharmacy 

Benefits Program will cover the vaccine 

and its administration by the retail 

network pharmacy, including 

administration by pharmacists who 

meet the applicable requirements of 

state law to administer the vaccine. A 

TRICARE authorized vaccine/

immunization includes only vaccines/

immunizations authorized as preventive 

care under the basic program benefits of 

§ 199.4 of this part, as well as such care 

authorized for Prime enrollees under the 

uniform HMO benefit of § 199.18. For 

Prime enrollees under the uniform HMO 

benefit, a referral is not required under 

paragraph (n)(2) of § 199.18 for 

preventive care vaccines/immunizations 

received from a retail network pharmacy 

that is a TRICARE authorized provider. 

Any additional policies, instructions, 

procedures, and guidelines appropriate 

for implementation of this benefit may 

be issued by the TMA Director. 

(5) Availability of selected over-thecounter (OTC) drugs under the 

pharmacy benefits program. Although 

the pharmacy benefits program 

generally covers only prescription 

drugs, in some cases over-the-counter 

drugs may be covered and may be 

placed on the uniform formulary. 

(i) An OTC drug may be included on 

the uniform formulary upon the 

recommendation of the Pharmacy and 

Therapeutics Committee and approval 

of the Director, DHA, based on a finding 

that it is cost-effective and clinically 

effective, as compared with other drugs 

in the same therapeutic class of 

pharmaceutical agents. Clinical need is 

judged by the criteria found in 

paragraph (e)(1)(i–ii) of this section. 

Cost effectiveness is determined based 

on criteria found in paragraph (e)(2) of 

this section. 

(ii) OTC drugs placed on the uniform 

formulary, in general, will be treated the 

same as generic drugs on the uniform 

formulary for purposes of availability in 

MTF pharmacies, retail pharmacies, and 

the mail order pharmacy program and 

other requirements. However, upon the 

recommendation of the Pharmacy and 

Therapeutics Committee and approval 

of the Director, DHA, the requirement 

for a prescription may be waived for a 

particular OTC drug for certain 

emergency care treatment situations. In 

addition, a special copayment may be 

established under paragraph (i)(2)(xii) of 

this section for OTC drugs specifically 

used in certain emergency care 

treatment situations. 

(i) * * * 

(2) * * * 

(i) * * * 

(ii) For pharmaceutical agents 

obtained from a retail network 

pharmacy there is a: 

(A) $17.00 co-payment per 

prescription required for up to a 30-day 

supply of a formulary pharmaceutical 

agent. 

(B) $5.00 co-payment per prescription 

for up to a 30-day supply of a generic 

pharmaceutical agent. 

(C) $44.00 co-payment per 

prescription for up to a 30-day supply 

of a non-formulary pharmaceutical 

agent. 

(D) $0.00 co-payment for vaccines/

immunizations authorized as preventive 

care for eligible beneficiaries. 


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(iii) For formulary and generic 

pharmaceutical agents obtained from a 

retail non-network pharmacy there is a 

20 percent or $17.00 co-payment 

(whichever is greater) per prescription 

for up to a 30-day supply of the 

pharmaceutical agent. 

(iv) For non-formulary 

pharmaceutical agents obtained at a 

retail non-network pharmacy there is a 

20 percent or $44.00 co-payment 

(whichever is greater) per prescription 

for up to a 30-day supply of the 

pharmaceutical agent. 

(v) For pharmaceutical agents 

obtained under the TRICARE mail-order 

program there is a: 

(A) $13.00 co-payment per 

prescription for up to a 90-day supply 

of a formulary pharmaceutical agent. 

(B) $0.00 co-payment for up to a 90- 

day supply of a generic pharmaceutical 

agent. 

(C) $43.00 co-payment for up to a 90- 

day supply of a non-formulary 

pharmaceutical agent. 

(D) $0.00 co-payment for smoking 

cessation pharmaceutical agents covered 

under the smoking cessation program. 

* * * * * 

(x) The per prescription co-payments 

established in this paragraph (i)(2) of 

this section may be adjusted 

periodically based on experience with 

the uniform formulary, changes in 

economic circumstances, and other 

appropriate factors. Any such 

adjustment must be approved by the 

Assistant Secretary of Defense (Health 

Affairs). These additional requirements 

apply: 

(A) Beginning January 1, 2014, the 

amounts specified in this paragraph 

(i)(2) of this section shall be increased 

annually by the percentage increase in 

the cost-of-living adjustment by which 

retired pay is increased under 10 U.S. 

Code section 1401a for the year, 

rounded down to the nearest dollar. 

However, with respect to any amount of 

increase that is less than $1 or any 

amount lost in rounding down to the 

nearest dollar, that amount shall be 

carried over to, and accumulated with, 

the amount of the increase for the 

subsequent year or years and made 

when the aggregate amount of increases 

carried over for a year is $1 or more. 

(B) Effective January 1, 2023 (unless 

otherwise provided by law), the 

Assistant Secretary of Defense for 

Health Affairs may adjust the amounts 

specified in this paragraph (i)(2) of this 

section as considered appropriate. 

Between January 1, 2014, and January 1, 

2023, the only adjustments allowed are 

the cost of living adjustments described 

in paragraph (i)(2)(x)(A) of this section, 

unless otherwise provided by law. 

* * * * * 

(xii) Special copayment rule for OTC 

drugs in the retail pharmacy network. 

As a general rule, OTC drugs placed on 

the uniform formulary under paragraph 

(h)(5) of this section will have 

copayments equal to those for generic 

drugs on the uniform formulary. 

However, upon the recommendation of 

the Pharmacy and Therapeutics 

Committee and approval of the Director, 

DHA, the copayment may be established 

at $0.00 for any particular OTC drug in 

the retail pharmacy network. 

(j) * * * 

(4) Upon the recommendation of the 

Pharmacy and Therapeutics Committee, 

a generic drug may be classified as nonformulary if it is less cost effective than 

non-generic formulary drugs in the same 

drug class. 

(5) The beneficiary copayment 

amount for any generic drug 

prescription may not exceed the total 

charge for that prescription. 

* * * * * 

Dated: September 15, 2014. 

Aaron Siegel, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense. 

[FR Doc. 2014–22276 Filed 9–18–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 100 

[Docket Number USCG–2014–0783] 

RIN 1625–AA08 

Special Local Regulations for Marine 

Events, Spa Creek; Annapolis, MD 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes to 

temporarily change the enforcement 

periods of special local regulations for a 

recurring marine event in the Fifth 

Coast Guard District. These regulations 

apply to the MRE Tug of War, a 

recurring marine event, and would be 

effective on November 8, 2014. Special 

local regulations are necessary to 

provide for the safety of life on 

navigable waters during the event. This 

action is intended to restrict vessel 

traffic in a portion of Spa Creek at 

Annapolis, MD during the event. 

DATES: Comments and related material 

must be received by the Coast Guard on 

or before October 20, 2014. 

ADDRESSES: You may submit comments 

identified by docket number using any 

one of the following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail or Delivery: Docket 

Management Facility (M–30), U.S. 

Department of Transportation, West 

Building Ground Floor, Room W12–140, 

1200 New Jersey Avenue SE., 

Washington, DC 20590–0001. Deliveries 

accepted between 9 a.m. and 5 p.m., 

Monday through Friday, except federal 

holidays. The telephone number is 202– 

366–9329. 

See the ‘‘Public Participation and 

Request for Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below for further instructions on 

submitting comments. To avoid 

duplication, please use only one of 

these three methods. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Mr. Ronald Houck, U.S. Coast 

Guard Sector Baltimore, MD; telephone 

410–576–2674, email 

Ronald.L.Houck@uscg.mil. If you have 

questions on viewing or submitting 

material to the docket, call Cheryl 

Collins, Program Manager, Docket 

Operations, telephone (202) 366–9826. 

SUPPLEMENTARY INFORMATION: 

Table of Acronyms 

DHS Department of Homeland Security 

FR Federal Register 

NPRM Notice of Proposed Rulemaking 

A. Public Participation and Request for 

Comments 

We encourage you to participate in 

this rulemaking by submitting 

comments and related materials. All 

comments received will be posted 

without change to http:// 

www.regulations.gov and will include 

any personal information you have 

provided. 

1. Submitting Comments 

If you submit a comment, please 

include the docket number for this 

rulemaking, indicate the specific section 

of this document to which each 

comment applies, and provide a reason 

for each suggestion or recommendation. 

You may submit your comments and 

material online at http:// 

www.regulations.gov, or by fax, mail, or 

hand delivery, but please use only one 

of these means. If you submit a 

comment online, it will be considered 

received by the Coast Guard when you 

successfully transmit the comment. If 

you fax, hand deliver, or mail your 

comment, it will be considered as 


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