opment than the VA National Formulary and do not provide useful comparisons. How they will compare after full implementation of improvements under the NDAA is unknown and presumably will depend on the details of changes.

GENERAL COMMENTS ON COMPARISONS

In examining private-and public-sector formularies and formulary systems in comparison to the VA National Formulary and formulary systems, the committee concluded that some formularies are more open. For example, Medicaid programs are required to offer all drugs on the Federal Supply Schedule. Some formularies are more restricted. For example, they require prior approval for many drugs and entirely exclude some drugs or drug classes. Drugs or drug classes are not excluded in the VA systems. All are variable, and some perhaps much more so (DOD) than the VA. Access barriers are sometimes more frequent, and sometimes less, and they vary in how burdensome they are in both the private and the public sectors. Some controls that may present real impediments to obtaining needed drugs, especially for low-income patients, such as relatively costly copayments and deductibles, are not features of the VA formulary system. Other controls, such as generic substitution and therapeutic interchange are in common use in many systems. The committee could not reach blanket conclusions on the relative restrictiveness of these highly variable comparison formularies and formulary systems. If a formulary appropriately controls drug costs, it may be more important to the VA since cost overruns and cost shifting have entirely different implications in a fixed budget system like the VA (or to some extent managed care) than they do in an open-ended entitlement like Medicaid. As has been concluded so often in this report, the key issue does not appear to be the details of a formulary, providing it is of reasonable size, inclusiveness, and quality. The important element for quality and restrictiveness is timely availability of a safe and effective, medically necessary drug, if not listed, through an exceptions process. A good formulary supports this element and, through its capacity to make quality choices, enhances price negotiations and prudent purchasing.



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