Military Update: Two drugs likely to kick off co-pay hike
April 7, 2005
Congress five years ago approved a Defense Department plan to slow pharmacy cost growth by creating a uniform drug formulary for the military, and by imposing higher co-payments on drugs knocked off the list as too expensive and no more effective than other medicines.
Finally, the process of identifying these “nonformulary” drugs has begun.
The first two are likely to be Teveten, a heart medication with only 2,200 known military users, and Nexium, a heavily marketed drug to treat acid reflux and peptic ulcers, and used by more than 137,000 beneficiaries.
Over time, the formulary review process should encourage hundreds of thousands of beneficiaries to switch to more cost-efficient medicines. But officials said they intentionally made their first recommendations modest, to avoid affecting too many beneficiaries before they understand the process.
A drug shifted to nonformulary status can’t be dispensed on base unless it’s prescribed by a staff physician and the patient can show medical necessity. Nonformulary drugs remain available through the Tricare Mail Order Program and the Tricare retail network, but for a higher co-payment.
For mail order, the charge is $3 for a 90-day supply of a generic drug, $9 for a formulary drug and $22 for nonformulary. The same tiers exist for the retail network, but the co-pays cover only 30 days of medication.
The Defense Department’s Pharmacy and Therapeutics Committee began screening to shape the uniform formulary by starting with drugs in two classes, and comparing clinical effectiveness and cost. The first class, Angiotensin Receptor Blockers (ARBs), is for hypertension and other heart conditions. Seven ARBs currently are on the uniform formulary.
The P&T Committee, which includes senior physicians and pharmacists, studied clinical trial data and found that Teveten had no significant advantages over the other drugs and was less cost-effective.
The second class reviewed is Proton Pump Inhibitors (PPIs) for treatment of acid reflux disease and peptic ulcers. Five PPIs are on the current formulary. One is an over-the-counter drug called Prilosec, Zegerid or by generic names. Four PPIs — Prevacid, Aciphex, Protonix and Nexium — require a prescription. All five, the committee found, have the same clinical effectiveness but Nexium is the most expensive.
Dr. William Winkenwerder, assistant secretary of defense for health affairs, will make the final decision on formulary changes. To help him, the law that authorized the uniform formulary also created a Beneficiary Advisory Panel to review P&T recommendations and to comment.
At its first public meeting in Washington on March 23, the beneficiary panel endorsed shifting the two drugs to nonformulary status. But a majority disagreed with the committee’s call to move Teveten off the formulary 30 days after a final decision, and Nexium after 90 days.
Sydney Hickey of the National Military Family Association said she won’t support a transition of less than 180 days for any drug getting bumped, until Defense officials show they have a plan to notify affected beneficiaries about the change. Other association representatives on the panel, all of them strong beneficiary advocates, agreed. A majority advised that the 30-day and 90-day implementation plans be rejected.
Dissenting from the majority were three doctors, all of whom expressed frustration that the P&T committee had moved too timidly in its first try to shape a more cost-efficient formulary.
“If two ARBs out of seven were found to be clinically useful and cost effective, why are six [retaining] formulary status?” asked Dr. Jan Prasad, a Tricare network cardiologist from Phoenix. “That’s ridiculous.”
Navy Cmdr. Denise Graham, a pharmacist supporting the P&T review process, said the idea was, “Let’s see how this plan works, impacting the least amount of beneficiaries that we can, and still get a cost-benefit.”
Another panel member, Dr. Jeffrey L. Lenow, a professor at Jefferson Medical College in Philadelphia, said he also had expected more aggressive cost-savings decisions from the P&T committee.
The military spent $77 million on ARB drugs last year. Teveten represented only one percent of those costs.
“I’m saying, ‘You’re chasing after one lousy ARB, which you have a tiny percentage of patients on, and you’ll go back and claim victory … Look at all the energy and time that went into this ARB review. Albeit excellently done, its net yield is going to be negligible,” said Lenow.
The panelists were advised that military pharmacy costs are nearing $5 billion a year. About 6.4 million beneficiaries had 100 million prescriptions filled in 2004. The least efficient pharmacy option for the military is the Tricare retail network, which handled 31 percent of the prescription workload last year yet accounted for 52 percent of drug costs.
Another beneficiary advisory panelist, Dr. Martha Miller, medical director of Health Net Federal Services, said keeping on the formulary many more drugs than needed for effective patient care “doesn’t make a lot of sense for those of us more familiar with the commercial world.”
But Chuck Partridge, representing the National Military and Veterans Alliance on the panel, said some patients have difficulty with one drug but not another, even though clinical trials show them to be equally effective.
“From a beneficiary’s point of view, I would like to see as much choice as possible,” Partridge said.
In June, the beneficiary panel will hold its second meeting to review P&T formulary recommendations for four more classes of drugs.