(Medicare Part D Manual)

 CMS will analyze the availability of the most commonly prescr ibed drug classes for the Medicare population (Appendix D).  This list is derived from Part D claims data.  The drugs identified will be expanded to the class level and used in the formulary review process.  CMS understands that sponsors  will not provide i dentical coverage of these drug classes, and CMS review will focus on ensuring that sponsors present a balanced formulary.  These drug classes will cover common diseases and conditions, and will allow CMS to ensure that sponsors are covering the most wide ly used medications, or therapeutically similar medications, for the most common conditions.    CMS will review all Part D sponsors formularies to ensure they contain all commercially available vaccines (unless excluded due to available reimbursement under Part B, e.g., influenza or pneumococcal vaccines , or if a commercially available vaccine manufacturer does not participate in the coverage gap discount program ).  Sponsors will only be allowed to use drug utilization management tools to:   o Assess the necessity of vaccines that are less commonly administered in the Medicare population, such as anthrax and yellow fever vaccines;   o Facilitate use of vaccines in line with Advisory Committee on Immunization Practices (ACIP) recommendations; and   o Evaluate potential  reimbursement of those vaccines that could be covered under Part B when directly related to the treatment of an injury or direct exposure to a disease or condition (e.g., tetanus).    UM restrictions will also be evaluated as part of the formulary content r eview.  In addition to ensuring that the use of these tools are consistent with industry best practices, CMS will also compare all sponsors formulary submissions to analyze the comparative use of UM tools.  When outliers are identified, CMS will request a clinical justification that supports the use of the submitted edits.  All formularies will be evaluated using the criteria above in this section.  Outliers for each area of review will be further evaluated by CMS to determine whether the outlier is deemed  potentially discriminatory.  Examples of this may include a lack of appropriate drug classes to treat certain diseases, a lack of sufficient drugs in a therapeutic class,  inappropriate tier placement that would discriminate against a group of beneficiarie s, or missing drugs that could discourage certain types of beneficiaries from enrolling in the plan.  If any of the outliers appear to create problems of access, sponsors will have the opportunity to present reasonable clinical justification s.  30.2.8 - Formulary Submission Timeline  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D sponsors that fail to meet formulary submission and re -submission deadlines during the formulary approval process may face a CMS determination that CMS cannot approve their Part D bids.  For most Part D sponsors, a failure to obtain bid approvals will result in the termination of their Part D sponsor or MA organization contracts effective at the end of the existing contract year.  In the case of an initial Part D sponsor or MA organization contract applicant, CMS would decline to enter into a contract with the organization.   Such a determination would be made on the basis that the organization had failed to submit a bid which CMS could approve, a determination that would not be subject to a request for appeal under Subpart N of 42 CFR 423 (for Part D sponsors) and 42 CFR 422 (for MA organizations).  30.3 - Formulary Changes  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  The removal of any drug, whether a Part D drug or a supplemental drug offered as a supplemental benefit under an enhanced alternative benefit design, is subject to the formulary change guidance contained in the following sections.   30.3.1 - Limitation on Changes in Therapeutic Classification  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  Except as CMS may permit to account for new therapeutic uses and newly approved Part D drugs, a Part D sponsor may not change formulary categories and classes after the last CMS specified HPMS formulary upload date for the upcoming contract year.   30.3.2 - Limitation of Formulary Changes Prior to Beginning of Contract Year  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Except when the FDA deems a Part D drug unsafe or a manufacturer removes a Part D drug from the market, a Part D sponsor may not remove a covered Part D drug from its formulary, or make any change in preferred or tiered cost -sharing status of a covered Par t D drug, between the beginning of the annual coordinated election period described in section 42 CFR 423.38(b) and 60 days after the beginning of t he contract year associated with the annual coordinated election period.  30.3.3 - Midyear Formulary Changes  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  Both industry best practices and the best interests of Medicare beneficiaries call for limited formulary changes during the contract year.  CMS believes that formulary stability is extremely important so that enrollees maintain access to the benefit they chose during enrollment as represented to them by the sponsor.  However, pres cription drug therapies are constantly evolving, and new drug availability, medical knowledge, and opportunities for improving safety and quality in prescription drug use at a low cost will inevitably occur over the course of the year.  As recognized in the statute and regulations, these new developments may require formulary changes during the year in order to provide high- quality, low -cost prescription drug coverage.   30.3.3.1 - Policy Regarding Formulary Changes  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  The following is CMS policy regarding formulary changes:    Part D sponsors may expand formularies by adding drugs to their formularies, reducing copayments or coinsurance by placing a drug on a lower cost -sharing tier, or deleting utilization management requirements at any time during the year.  Such changes can be implemented immediately by a sponsor and should be submitted to CMS at the next scheduled opportunity.   CMS considers negative formulary changes to include the following: 1) removal of a drug from a formulary; 2) increasing the cost -sharing status of a drug on the formulary subsequent to a change in tier; 3) adding, or making more restrictive: a) prior authorization requirements, b) quantit y limits, c) step thera py requirements, and 4) imposing other restrictions on a drug that require CMS approval.  CMS also considers the expiration of an approved exception to be a negative formulary change for purposes of required advance notice to the beneficiary.  Sponsors should consult chapter 18, section 30.2 for further guidance on beneficiary notification requirements for approved exceptions , available at https://www.cms.gov/Medicare/Appeals -and-Grievances/MedPrescriptDrugApplGriev/Downloads/Chapter18.zip .  o Formulary Maintenance Changes: After March 1, Part D sponsors may make maintenance changes to their formulary, such as replacing brand name with new gene ric drugs or modifying formularies as a result of new information on drug safety or effectiveness.   o Non-maintenance (Other) Formulary Changes: Part D sponsors may remove Part D drugs from their formulary, move covered Part D drugs to a less preferred tier status, or add utilization management requirements.  For these additional types of formulary changes approved by CMS, Part D sponsors should make such formulary changes only if enrollees currently taking the affected drug are exempt from the formulary chan ge for the remainder of the contract year.   Part D sponsors must receive CMS approval of any changes to their formulary; however, Part D sponsors are not required to obtain CMS approval for drugs that have been withdrawn from the market by either the FDA o r a product manufacturer.   Beginning in CY 2014, while CMS will continue to offer a summer formulary update, formulary changes during this particular update submission will be limited to: 1) the addition of drugs that are new to the summer release of the F ormulary Reference File (historically posted in July); and 2) the submission of negative changes on brand name drugs, only if the equivalent generic is added to the summer FRF and corresponding formulary file.  As noted previously, positive formulary changes can be implemented at any time, consistent with guidance on the timely ongoing review of all new FDA -approved drug products and indications.  Sponsors should consult  the Prescription Drug Benefit Manual, Chapter 2 (Medicare Marketing Guidelines), Sectio n 60.5, Formulary and Formulary Change Notice Requirements, and Chapter 5 for further guidance related to print and website versions of their form ularies.  30.3.3.2 - Formulary Maintenance Changes  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  In order to promote best practices and protect the interests of Medicare beneficiaries, CMS will generally give positive consideration to the following types of formulary changes:    Removal or placement in a less preferred tier of a brand name drug upon the availability and addition of an A -rated generic or multi- source brand name equivalent, at a tier with lower  cost to the beneficiary.    Removal of a non- Part D drug inadvertently inc luded on the formulary.    Addition of utilization management tools based upon a new FDA boxed warning.    Removal of a drug based upon a new FDA market withdrawal notice.    Removal of a drug based on long term shortage and market availability (described in chapter 5, section 50.13).    Removal or placement in a less preferred tier based upon new clinical guidelines or information recognized by CMS (e.g., CDCs recommendation against using older antivirals for treatment and prophylaxis of the flu).   The addition of utilization management when necessary to effectuate other approved formulary changes (e.g., prior authorization on a brand name drug when generic is now available on formulary at a lower cost), to help determine B vs. D coverage (subject to CMS guidance on least burdensome ways to make this determination), or to promote safe utilization of a Part D drug based upon new clinical guidelines or information.   Part D sponsors will need to provide a justification when submitting formulary maintenance change requ ests, but they may assume that change requests based upon these justifications are approved if they do not hear from CM S within 30 days of submission.  30.3.3.3 - Non-maintenance (Other) Formulary Changes  (Rev. 2, Issued:  07- 18-08; Effective/Implementatio n Date:  07 -18-08)  Experience with formulary management indicates that the vast majority of formulary changes are maintenance changes that would generally be approved by CMS.  CMS will review additional types of non -maintenance formulary change requests  and their corresponding justification.  Part D sponsors should make such formulary changes only if enrollees currently taking the affected drug are exempt from the formulary change for the remainder of the contract year.  These additional types of change requests include, but are not limited to:    Changing preferred or non- preferred formulary drugs, adding utilization management, or increasing cost sharing on preferred drugs (unrelated to the reasons stated above);    Removing dosage forms; or    Exchanging therapeutic alternatives (either by formulary addition/removal or tier exchanges).   If CMS disapproves a formulary change request, the justification for disapproval will generally be based on one of the following:    The reasonableness and/or necessity for t he proposed change in the context of preventing any appearance of bait and switch in the formulary.  Medicare beneficiaries select Part D sponsors, in part, based on the formulary that is marketed during annual open enrollment and, therefore, have a legi timate expectation that they will have continuing access to coverage of the Part D drugs they are using throughout the contract year.  This beneficiary expectation will be balanced against the sponsors desire to practice good formulary management in order  to provide a low -cost, high- quality prescription drug benefit that continues to effectively meet the needs of beneficiaries.  Part D sponsors may avoid any appearance of a bait and switch concern by exempting enrollees who are currently using the affect ed drugs from the formulary change for the remainder of the contract year.    The proposed change on its face in the context of substantially discouraging enrollment by certain beneficiary groups.    The impact of the proposed change on the formulary as a whol e to ensure the formulary continues to satisfy the minimum formulary requirements established by CMS.   Because these additional types of change requests will require more extensive review by CMS, Part D sponsors must not implement such changes until they r eceive explicit notification of approval from CMS and must not issue any beneficiary notices of such forthcoming changes prior to receiving explicit and affirmative CMS approval.  30.3.4 - Provision of Notice Regarding Formulary Changes  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)