Formularies are used to help control pharmacy costs, enhance patient safety, and improve quality of care by, among other things, limiting drug choices to those a health care organization has determined are the most medically appropriate and cost-effective for a given patient population. As early as 1955, VA medical centers began using formularies, and at the time, each medical center maintained its own formulary at the local level. In September 1995, VA created a centralized group to manage its pharmacy benefit nationwide, now called PBM, and soon began the process of moving to a single, national formulary. As an interim step, VA established regional formularies operated by each VISN. On June 1, 1997, VA implemented the national formulary to help standardize veterans’ access to care across the country, though the medical centers and VISNs continued to maintain their own local and regional formularies. In 2001, VA abolished medical center formularies and in 2009, VA eliminated VISN formularies. Discussion of the elimination of the regional VISN formularies began in 2005. In 2006, VA reviewed all drugs on VISN formularies that were not on the national formulary to determine if these drugs should be considered for inclusion on the national formulary. According to officials from VA’s PBM, in cases where VA decided not to add a drug from a VISN formulary to the national formulary, VISN and medical center staff were given 6 months to appeal the decision. In the end, 91 drugs from VISN formularies were added to the national formulary. Around the same time that this review was taking place, VISNs were asked to stop adding new drugs to their formularies, unless the drugs were also being added at the national level. While VISNs and medical centers no longer maintain their own formularies, VA’s decentralized approach to developing VistA means that each medical center is still responsible for maintaining a local drug file that matches VA’s national drug file. In addition to maintaining a local drug file, each medical center decides whether and how it will customize other VistA applications onsite. VistA contains over a hundred separate computer applications, including the Computerized Patient Record System (CPRS). VA providers can use CPRS to review and update patient medical records and to place electronic orders for medications, procedures, and tests. As part of its responsibilities for managing VA’s pharmacy benefit at the national level, VA’s PBM updates the national formulary listing, maintains databases that track drug use, and reviews data on nonformulary drug requests that it requires each VISN to report quarterly. PBM clinicians are responsible for maintaining a clinical portfolio on drugs for certain diseases, and are expected to continuously review information on new drugs that are relevant to their portfolio, as well as stay current on information on existing drugs. When appropriate, these clinicians will initiate a drug review. PBM works with MAP and the VPE Committee to conduct reviews of drugs for its national formulary, including the review of drugs approved by FDA for use on the market. In addition to working with VA’s PBM on the national-level VPE Committee, each VPE works in conjunction with its VISN formulary committee at the regional level to provide oversight and guidance for national formulary management activities for the medical centers within the network. In turn, at the medical center level, each chief of pharmacy works with the local P&T committee to implement national formulary decisions and ensure compliance with these decisions. (See fig. 1.) Although nearly all drugs that VA providers prescribe are on the national formulary, in some cases, providers determine that it is clinically necessary to prescribe nonformulary drugs. VA monitors the prescription of nonformulary drugs to ensure appropriate use and accordingly, each VA medical center must have a nonformulary drug request process. While VISNs and medical centers are responsible for implementing the nonformulary drug request process, VA has outlined certain requirements within its formulary management handbook. The handbook states that, at the local level, each VA medical center is responsible for establishing a process to adjudicate nonformulary drug requests that ensures decisions are evidence-based in accordance with certain prescribing criteria. VA also requires that medical centers adjudicate nonformulary drug requests within 96 hours. Each medical center chief of staff is responsible for establishing a system to address any provider-initiated appeals of denied nonformulary drug requests. At the regional level, VISNs are responsible for ensuring that medical centers have a nonformulary drug request process in place. Each VISN is also responsible for establishing a process to analyze nonformulary drug request data at the VISN and medical center levels to determine if the process is implemented appropriately and effectively in medical centers, and report these data to VA’s PBM on a quarterly basis. Reported information must include the numbers of nonformulary drug requests received, approved, and denied as well as the average time taken to adjudicate completed requests. In addition to requirements for the nonformulary drug request process, the handbook requires that VISNs ensure that local forums exist where formulary issues can be discussed with veterans service organizations (VSOs) on an ongoing basis. While VSO meetings may also be held at the regional and national level, there is no requirement that these meetings organize specifically for the purposes of discussing formulary issues. We previously reported on the national formulary in December 1999 and in January 2001. We found that veterans had access to needed medications, but VA needed to improve its oversight activities. In our 2001 report, we recommended that VA take steps to better ensure that VISNs and medical centers comply with the national formulary and nonformulary drug request policies and procedures. VA responded to these recommendations by, among other things, having its PBM check drug utilization data—which tracks drugs dispensed across VA—for outliers and requiring that nonformulary drug requests be adjudicated within 96 hours. VA uses a standardized process to review drugs for its national formulary that is coordinated at the national level by its PBM. PBM’s Chief Consultant told us that most reviews are initiated in response to FDA’s approval of drugs for use on the market. To begin reviewing a drug for inclusion on the national formulary, clinicians from PBM develop evidence-based drug monographs that include information on safety, efficacy, and cost, and seek comments on these monographs from VISN and medical center staff. Completed monographs are then reviewed by MAP and the VPE Committee, who vote on whether to add the drug to the national formulary. A majority of the drugs VA considered for addition to the national formulary in 2008 and 2009 were reviewed within one year of FDA approval, but there were various factors that caused some reviews to take longer. VA’s drug review process is coordinated at the national level by its PBM, whose Chief Consultant told us that most reviews are initiated following FDA’s approval of a drug for use on the market to determine whether to add the drug to the national formulary. While there are different types of FDA approvals, PBM’s Chief Consultant said that most drug reviews are triggered by FDA approval of a new drug. PBM also initiates drug reviews to consider whether to remove a drug from the national formulary, such as in response to the emergence of new safety issues. Additionally, PBM officials said that they may decide to conduct a drug class review to determine whether there is superiority of one or more drugs in a class, or if the drugs are equivalent in terms of safety and efficacy. Such reviews are undertaken when VA is considering negotiating a drug contract or to determine a drug’s place in therapy relative to other drugs in its class. According to VA officials, medical center staff can submit requests to their local P&T committees to review a drug for addition to or removal from the national formulary. P&T committees review and forward approved requests to their regional VISN formulary committees. If VISN formulary committees review and approve requests, they forward them to VA’s PBM for consideration at the national level. In 2009, VISNs submitted 13 requests for drug reviews, and while 2 of the requests were later withdrawn, PBM approved all of the requests for national review. VA uses a standardized process to review drugs for inclusion on its national formulary, which begins with a clinician from its PBM researching relevant literature to develop an evidence-based drug monograph. Each drug monograph includes the clinician’s research methodology, safety and efficacy tables, and data on cost. Further, the clinician may consult with VA subject matter experts to assist with the development of monographs when necessary. Once a draft of a monograph is ready, the clinician forwards it to the VPEs and requests that the document be disseminated to VISN and medical center staff, including physicians and pharmacists, for comment. Generally, within a period of 2 to 4 weeks, comments about the monograph are returned to the PBM clinician. The clinician compiles and reviews these comments, and incorporates any changes deemed appropriate to the monograph. Once VA’s PBM has completed a drug monograph, MAP and the VPE Committee review PBM’s findings and vote whether to add the drug to the national formulary based on an assessment of the drug’s safety, efficacy, and cost as well as its relevance to the veteran population. While most members of MAP and the VPE Committee are VA staff, a clinical representative from DOD participates in the MAP and VPE Committee meetings and votes on MAP decisions. A number of MAP and VPE Committee members we interviewed told us that they consider a drug’s safety and efficacy before they consider cost when reviewing a monograph.