PHARMACEUTICALS BRIEFING

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PHARMACEUTICALS BRIEFING
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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR (PPV) PROGRAM
• McKesson Corporation is the current PPV
  contractor
• Contractor presently performing on 2nd of three
  2-year options
• Contract coverage provided to 600 customers in
  the 50 States, Puerto Rico, Virgin Islands, The
  Philippines and Saipan

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• Mandatory for VA Facilities
• -Seven Consolidated Mail Outpatient
• Pharmacy facilities (CMOP)
• -VA Medical Centers (VAMC), Outpatient
• Clinics and Satellite Pharmacies
• -Entitled to Big4 Pricing

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• PPV Program Discretionary for Other Government
  Agencies (OGAs)
• OGAs Entitled to Big 4 Pricing
• - Health and Human Services
• - Department of Defense
• - Coast Guard

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• Indian Health Service (IHS)
• -Entitled to Big 4 Pricing
• -Nine Federal National or Regional IHS
• Supply Service Centers
• -Tribal and Urban Health Clinics Included
• --Tribal facilities must have affiliation with
• an IHS facility for access to the PPV
• Program

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• State Veterans Homes (SVH)
• -An approved and executed sharing
• agreement required for access to FSS prices
• -Access to FSS like prices on covered
• drugs only, if no sharing agreement

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• State Veterans Homes (SVH)
• -Operate under two scenarios on the
• PPV Program
• Option 1 SVH orders directly, receives
• deliveries and makes direct payment using
  
• State funds
• Option 2 SVH delivery orders are approved
  by
• VA Medical Center. SVH receives
  delivery,
• VA receives the invoice and makes payment

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PHARMACEUTICALS BRIEFING

• PHARMACEUTICAL PRIME VENDOR PROGRAM
• PPV Prices
• - Established by FSS, National
• Standardization, BPAs and other Federal
• Government contracts
• -PPV prices updated daily
• -Prices can be accessed at
• www.pbm.va.gov/pbm/prices.htm

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PHARMACEUTICALS BRIEFING

• STANDARDIZATION PROGRAM
• Purpose and Benefits of Standardization
• Competitive Process
• -Negotiated Procedures
• -Requirements-Type Contracts

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PHARMACEUTICALS BRIEFING

• STANDARDIZATION PROGRAM
• Contract Requirements
• -National Drug Code (NDC) numbers unique
• to contractors
• -Drugs must be from designated countries
• -FDA compliant manufacturing facilities

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BRIEF OVERVIEW OF THE VA NATIONAL FORMULARY
PROCESS

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Objectives

• Describe the key functions of the VA Pharmacy
  Benefits Management Services (PBM)
• Describe the key objectives of the VA Formulary
  Management Process
• Understand how drugs are added to the VA National
  Formulary

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VA Profile

• Comprehensive health care system
• Direct provider of care
• Providers are employees
• Own and operate infrastructure
• Prescription drug benefit is integrated, not
  added on or contracted out
• VA Pharmacy Benefits Management Services (PBM)

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PBM Statistics (FY 2007)

• 4.4 million VA pharmacy users
• 122 million outpatient prescriptions
• 94 million via mail order
• 28 million via medical care facility pharmacies
• 3.3 billion on outpatient drug expenditures
• Cost per RX nearly flat for last 9 years
• Cost low for population

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Key PBM Functions

• Drug benefit design
• Professional pharmacy practice development
• HR, roles, etc.
• Pharmacy policy development and deployment
• Centralized prescription processing
• Consolidated Mail Outpatient Pharmacy (CMOP)
• Education
• Staff CE/CME, pharmacy residency program
• Patient safety
• VAMedSafe, ADE reporting and analysis, post
  marketing surveillance

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Key PBM Functions

• Data management
• Provide end user access to facility-specific drug
  utilization data via the VA intranet, VistA
  Pharmacy reengineering
• Evidence-based formulary management
• Pharmacologic management algorithms, guidelines,
  reviews, contracting, structure and process, etc.
• DOD collaboration
• Contracting for pharmaceuticals, algorithm /
  guideline development, CMOP pilot

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Key PBM Functions

• Utilization management
• Outcomes assessment, pharmacoepidemiology,
  national drug use evaluations
• Emergency Pharmacy Services
• drug caches, disaster relief
• Stakeholder relations
• Congress, advocacy groups, VA, etc.
• Administration of Public Law 102-585
• Federal Drug Pricing

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PBM Organizational Alignment
Office of the Under Secretary for Health

Office of Patient Care Services
Pharmacy Benefits Management Services
VACO PBM Office
Hines, IL PBM Office
Emergency Pharmacy Services
Formulary Management
Consolidated Mail Outpatient Pharmacies
Bedford
Dallas
Tucson
Leavenworth
Murfreesboro
Charleston
Great Lakes
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Formulary Management
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ID areas of opportunity
PBM-MAP Drug Use Management Process

• Review
• RX volume
• RX expenditures
• New Drugs

Monitor Performance
Assess feasibility

• Contract Participation
• Utilization Management
• Use of Criteria

• Review
• Medical Literature
• VA Prescribing
• Clinical Need

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Implement action(s)
Present issue to stakeholders

• One or more of
• Issue Drug Use Criteria
• Conduct Solicitation
• Negotiate BPA

• Medical Advisory Panel (MAP)
• VISN Formulary Leaders (VFLs)
• Get input from front line
• clinical staff
• Chief Clinical Consultants
• DoD
• Pharmacoeconomic Center
• P T Committee

Determine action(s)

• Nothing
• One or more of
• Guideline
• Criteria for Use
• National Contract
• Incentive Agreement

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Tools

• Utilization Management
• PBM-MAP Pharmacologic Management Guidelines
• PBM-MAP Drug Use Criteria
• Formulary Design (generics, formulary status)

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Tools

• Contracting
• Federal Ceiling Price- FCP (Public Law 102-585,
  Section 603 24 off Non-Federal Average
  Manufacturer Price or Non-FAMP)
• Federal Supply Schedule (FSS- sometimes below
  Federal Ceiling Price)
• Performance-based Incentive Agreements
  (additional 5 to 15 off FSS)
• National Standardization Contracts (additional 10
  to 60 off FSS)

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Tools

• Distribution Systems
• Pharmacy Inventory Management
• Pharmaceutical Prime Vendor (5 discount off
  contract price)
• CMOP Dispensing

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Strategies

• Physician / pharmacist buy-in
• Before formulary decisions are made and
  implemented, each VA clinician has an opportunity
  to provide input (on drug class reviews,
  algorithms, criteria for use guidance, VA
  national formulary initiatives, etc.)
• Due to up front buy-in and evidentiary basis of
  reviews, contract adherence for closed classes
  is rapid and extensive. Adherence can reach 90
  in 3 months and gt98 within 6 months

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Impact on Cost and Utilization
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Prescription Dispensing Trends
30-day Equivalent Rxs
Actual Rxs
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30-day Equivalent Rxs
TOTAL
CMOP
VAMC
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Total Drug Cost Trends
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Average Drug Cost Trends
13.28 in Sep 2007
12.91 in Oct 1998
lt3 increase over 9 years
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Patient Drug Cost Trends
751 in FY 2007
25 increase over 9 years
599 in FY 1998
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Thank You!