PBMs, Rx Firms Blast Draft Part D Formulary Model Issued by USP

Managed Care Week, August 23, 2004

Both pharmaceutical companies and pharmacy benefit managers were disappointed with a draft model released by CMS last week indicating how a formulary might be structured for the Medicare Part D benefit.

The model, prepared by nongovernmental standards-setting organization United States Pharmacopeial Convention, Inc. (USP) proposed a methodology for grouping pharmaceuticals into therapeutic categories and classes. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 directed USP to develop the model, which is likely to undergo significant revision before being finalized later this year.

The Pharmaceutical Care Management Assn. (PCMA), which represents PBMs, criticized the draft for including too many therapeutic classes, while the Pharmaceutical Research and Manufacturers of America (PhRMA) said it had too few.

How broadly each category and class is defined is a crucial aspect of the Part D drug benefit, because the law requires Medicare pharmacy plans to offer as few as two drugs in each category. Using a smaller number of broad buckets gives pharmacy plans more negotiating power with drug companies over which medications will be included on formularies.

USP's draft list has 43 categories and 138 drug classes. For example, cardiovascular medications are grouped into one therapeutic category with 11 pharmacologic classes, such as beta-blockers, and 20 subdivisions like nonselective and cardioselective beta-blockers.

By comparison, Aetna, Inc. uses a formulary for its federal employee product with 17 categories and 108 classes, USP said. WellPoint Health Networks, Inc.'s formulary lists 26 categories and 99 classes, while AdvancePCS's formulary has 17 categories and 95 classes.

"Employers, unions, health plans, and other purchasers typically offer prescription drug plans with coverage for 50 to 100 therapeutic classes," PCMA said. If USP's draft model is embraced, "such an approach would move far beyond how formularies are structured currently in the commercial marketplace," it warned.

PhRMA said the draft "fails to provide patients with critical medicine options. USP unaccountably clusters commonly prescribed types of medicines with outmoded forms of treatment, allowing plans to structure formularies that exclude many types of the medicines that patients use and need and doctors prescribe."

CMS will hold a public meeting to discuss the draft in Baltimore on Aug. 27, 2004, and will close the public comment period on Sept. 17. USP expects to submit a final version of the formulary model to CMS in December.

View the draft guidelines at www.usp.org/pdf/drugInformation/mmg/draftModelGuidelines.pdf.


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