What You Wanted to Know About Formularies

1. What You Wanted to Know About Formularies Emmanuelle Mirsakov Pharm.D. Candidate 2007 USC School Of Pharmacy

2. Purpose of a Formulary • To manage costs and improve quality of care • Goal of Formulary review process: • To provide a quality pharmaceutical benefit, determined through an evidence based decision-making process, taking into account the reality of constrained health care budgets.

3. Who is Behind the Formulary Process? • P+T Committee (Pharmaceutical and Therapeutics Committee) • Physicians • Pharmacists • Nurses • Economists • And more…

4. Types of Formularies

5. Example of Preferred Tiered Copay • Tier 1 copay: $10 (generics) • Tier 2 copay: $25 (branded, formulary) • Tier 3 copay: $40-$100 (covered, nonformulary, branded or generic) • Tier 4 copay: 100% of price (not covered medications)

6. Pros and Cons of a Preferred List

7. Decisions of a Formulary List • 1. Clinical: • Based on strength of scientific evidence and standards of practice • Clinical trials • Published practice guidelines • Comparing efficacy • Equivalent drugs: dose, clearance, dose adjustments… • Usually 2-3 drugs per therapeutic class

8. Decisions of a Formulary List • 2. Economic: • Equivalency Assumption = cost • Drug therapy impact on health costs • Incentives/ rebates • Generics

9. Decisions of a Formulary List • 3. Other: • Demographics of patient population • Bias of the organization (Christian Foundation, Jewish organization…)

10. Cost Saving Techniques • Prior Authorization • Quantity Limitation • Mail Order • Step therapy • Generics

11. Prior Authorizations • Restricts Coverage of certain drugs based on the patient’s conditions • Usually need to try an alternative first • Usually for drugs in the range of $250-$2,000/month

12. Quantity Limits • Pre-defined maximal quantities (restrict dosage units for an X amt of days) • Established to decrease abuse and overuse • Improve compliance • Lower costs

13. Mail Order • Automation and high volume purchasing, allows filling of prescriptions at a lower fee structure than a retail facility • Other benefits of mail service include provision of patient education materials on the products dispensed, "24/7" pharmacist consultation availability, success in moving patients to more cost-efficient treatment choices, successful compliance programs • Don’t be fooled, they have to make up the difference somewhere

14. Step Therapy • Step therapy: The practice of beginning drug therapy for a medical condition with the most cost-effective and safest drug therapy and progressing to other more costly or risky therapy, only if necessary. The aims are to control costs and minimize risks.

15. Commonly Excluded Drugs • Prenatal vitamins • Fertility agents • Sexual Dysfunction Agents • Oral Contraceptives • Cosmetic Drugs • OTC • Experimental/ Off-label Use

16. Checks and Balances • Quality Control • Accreditation programs (Joint Commission on Accreditation of Health care organizations; National Committee for Quality Assurance) • Outcomes • Cost/ Are the savings real?

17. Fidelis • Preferred Drug list • NY Medicaid Formulary • Quantity Limits • Covers all generics/ Generic bias • Step-Therapy • Prior Authorization • Includes classes for major disease states • Excludes erectile dysfunction and OC (Fideles is a Catholic organization); Includes pre-natal vitamins and OTC

18. Fidelis A Medicaid HMO • 2 Components: • Managed care coverage for low income who do not qualify for Medicaid • NY State Medicaid • Benefits must be at the level of the state fee-for-service programs • Contracting out to managed care entities relieves gov’t

19. Medicaid Coverage • Free services and medications • Covers non prescription medications and products • Prosthetics • Durable medical equipment • Diapers • Pre-natal and children’s vitamins

20. Thanks! • Thank you for listening • Okay… I am ready for your questions