Management of Drug Formulary

1. Management of Drug Formulary Dimitry Gotlinsky Western University Managed Care Clerkship ProPharma Pharmaceutical Consultants, Inc. 06/16/06

2. Drug Formulary • A drug formulary is a preferred list of medications developed by health care professionals • Promotes high quality medical care that is affordable for patients • Features a continually revised list of prescription medications

3. The Formulary System • Provides drug product selection and formulary maintenance • Drug utilization review • Periodic evaluation and analysis of treatment protocols and procedures • Monitoring, reporting, and analysis of adverse results of drug therapy

4. Techniques of Formulary System Management • 3 general categories a) Drug use evaluation b) Formulary maintenance c) Drug product selection

5. Drug Use Evaluation • Diagnosis criteria • Prescriber criteria • Drug-specific criteria

6. Formulary Maintenance • Therapeutic drug class review • Formulary addition or deletion • Use of non-formulary drugs

7. Drug Product Selection • Generic substitution • Therapeutic Interchange

8. How are Formularies Chosen? • Not all drugs are created equal • Safety and efficacy are the 2 most important aspects of choosing a formulary • Based on recommendations of Pharmacy & Therapeutics Committee

9. Members of P & T Committee • Physicians • Pharmacists • Nurses • Administrators • Quality assurance coordinators • Epidemiologists/specialists • Ethicists

10. P & T Committee Duties • Appraises, evaluates, and selects drugs for the formulary • Meets as frequently as is necessary to review and update the formulary • Oversees quality improvement programs that employ drug use evaluation • Implement generic substitution and therapeutic interchange • Develops protocols and procedures for the use of non-formulary drugs

11. Types of Formularies • Open -greatest level of flexibility - typically 2-tiered benefit design • Multi-tier -provides for a high level of flexibility -most of the time utilizes 3-tier benefit design, but can more • Closed -least level of flexibility -involves use of NDC blocks and prior authorizations

12. Cost of Medications • Cost is just one of many factors that plays a role • Basing formulary system decisions on cost factors is secondary • First priority is to establish safety, efficacy, and therapeutic need • Lower cost drug for the same condition does not get automatically picked

13. Non-Formularies • The formulary system should: a) enable individual patients needs to be met with non-formulary drug products b) provide access to a formal appeal process if a request for a non-formulary drug is denied c) institute an efficient process for the timely obtaining of non-formulary drug products d) include policies that state that practitioners should not be penalized for prescribing non-formulary drugs

14. Good Formulary System • Informative • Proactively inform practitioners about changes to the formulary • Disclose the existence of formularies • Provide rationale for specific formulary decisions when requested • Provide patient education programs

15. AMCP • Health care systems frequently conduct formulary decision-making under uncertain conditions • Needed a standardized approach to support product evaluation and selection with clinical outcomes as the most important consideration • Approved a set of guidelines for MCOs to use when considering drugs for inclusion in formularies

16. AMCP Format • Allow a health system and its P&T committee to determine: a) clinical benefits b) risks c) evaluate value d) determine overall cost consequences to their health system

17. AMCP Guideline Goals • Establish a comprehensive, standardized, evidence-based process for evaluation of clinical and economic data • Provide manufacturers with a consistent format for providing necessary information • Improve the timeliness, quality and relevance of information available to P&T committees

18. AMCP “Dossier” Content • Approved and off-label indications • PK and PD • Dose and Duration • Safety Information • Key economic study results • Economic evaluation support data • Demographics

19. In Conclusion • American public is unwilling to accept limits on the use of health care services • Major factor contributing to resistance of cost-effectiveness analysis • AMCP format will help health systems establish a rational evidence-based decision making • As a result will gain the confidence and trust of patients as well as clinicians, payers and members

20. Questions?