All other drugs listed in the formulary are considered "open" and must be provided by DVA facilities. However, in contrast to the "closed" classes of drugs, local areas may use additional therapeutic agents in an effort to best serve their patient populations. Antibiotics are treated in this manner and are not restricted by the national formulary.

The flexibility offered by a tiered system has allowed certain VHA facilities to design their own procedures for using antibiotics. For instance, the Portland VHA facility uses the services of an infectious diseases team to make an annual review of antimicrobial agents as they pertain to their local patient population. The infectious diseases team consists of clinical microbiologists, physicians, and pharmacists. For any particular drug, the team may allow physicians complete freedom in ordering prescriptions or may require physicians to obtain approval from the team before ordering their use (Larry Strausbaugh, hospital epidemiologist and staff physician, Veterans Administration Hospital Center, personal communication, August 1999).

As indicated in the workshop summary, controversy surrounds the use of formularies and the DVA National Formulary has not been spared. Questions have been raised by both the veterans served by VHA and members of the U.S. Congress who appropriate funds to the VHA. As a result, the Institute of Medicine is currently engaged in a study, mandated by the U.S. Congress, to analyze the DVA National Formulary. Its primary objectives include answering the following the questions:

1. Is the DVA National Formulary overly restrictive and does it prevent physicians from meeting the unique health care needs of veterans?

2. What are the potential costs to DVA health care associated with the DVA National Formulary?

3. What are the effects of the DVA National Formulary and related policies on quality of care?

4. How does the DVA National Formulary compare with private insurance formularies for drugs and devices and with other government formularies (e.g., that of Medicaid)?

As was the case with VHA's association with educational institutions, the uniqueness of the DVA National Formulary lies in its sheer strength and size. Currently, DVA spends approximately $1 billion on pharmaceuticals annually (Kunzi, 1999), including about $170 million on antimicrobial agents. This provides VHA with a large amount of leverage when contracting for new pharmaceuticals. In addition, the Veterans Health Care Act of 1992 requires pharmaceutical companies to offer selected products to VHA at the Federal Ceiling Price, which is approximately equal to the average nonfederal manufacturer's price plus a 24 percent discount (Kunzi, 1999).