Description and Analysis of the VA National Formulary (2000) / Chapter Skim
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Introduction
Introduction
Pages 11-36
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From page 11... ...
House Report 105-610 also directed the Secretary of Veterans Affairs to report separately on the nonformulary waiver process operated by each Veterans Integrated Service Network (VISN, 1 of 22 House Report 105-610.
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From page 12... ...
Noting that the language of House Report 105-610 had not been included in the House-Senate conference report, Senator Rockefeller asked the GAO, in addition to the IOM study, to compare the VA National Formulary to formularies of health maintenance organizations and Medicaid, to assess the fairness of the drug selection process and the timeliness and convenience of the nonformulary process, and to investigate whether the VA Medical Advisory Panel (MAP) , the VISN Formulary committees, and the VA Pharmacy Benefits Management Strategic Healthcare Group (VA PBM)
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From page 13... ...
The task order also stipulated that an analysis of the VA system was to consider the nonformulary process a part of pharmacy benefits. The VA formulary system was understood to mean the National Formulary, VISN formularies, VA medical center formularies, and the nonformulary process as well as drug treatment guidelines.
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From page 14... ...
Their experience was especially relevant to understanding VISNs, which are essentially regional veterans MCOs, and to comparing the National Formulary with private-sector formularies. Committee members from national pharmacy benefits management (PBMs)
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From page 15... ...
The committee enjoyed good cooperation and responsiveness in the provision of data from the VA PBM, both from the central office in Washington, D.C., and from the operational VA PBM headquarters located outside Chicago. Members of the MAP and other individual staff from VA facilities around the United States also contributed much useful information.
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From page 16... ...
In that year, the ASHP also published the American Hospital Formulary Service, a loose-leaf binder containing clinical, technical, and dosing information to serve as a reference on all drugs for pharmacists and other heath care professionals. Other standards and policy statements have followed at intervals (see American College of Physicians EACH, 1990, AHA, 1974, 1975, 1999, AMA, 1994, ASHP, 1981, 1983, 1988, ASHP et al., 1964, Francke, 1967, Hoffman, 1984, King, 1987, Sonnedecker, 1972, 1976, Wein
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From page 17... ...
, which supported HMOs, new forms of MCOs such as independent practice association (IPAs) and network models, were developed, and many of these, including some very large managed care health systems, began to use formularies to control their inpatient and outpatient pharmacy benefits (Dillon, 1999~.
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From page 18... ...
of physician and pharmacy experts, objectively evaluates, appraises, and selects from among numerous available drug entities and drug products, those that are considered most useful in patient care.
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From page 19... ...
Types of Formularies and Their Restrictiveness As noted above, almost all organized health care settings or systems use Formularies to serve various objectives, quality drug treatment, cost control, drug price negotiation, among others. Formularies differ, therefore, but fundamentally they are lists of drugs that may be "open," that is, they contain many drugs and drug products, and those that are not listed are generally available and reimbursed, or "closed" (in whole or in part)
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From page 20... ...
Only a few representatives from one or more therapeutic classes 3 Generic substitution is the exchange of drug products that have the same, chemically identical, active ingredients and are identical in strength, concentration, dosage form, and route of administration to the drug prescribed. Therapeutic interchange is the authorized exchange of various therapeutic alternates by pharmacists under arrangements between pharmacists and authorized prescribers who have previously established written guidelines or protocols within a formulary system.
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From page 21... ...
These latter restrictions are often considered benefit controls. Generic substitution and therapeutic interchange are tools used within a formulary system to gain enhanced compliance with formulary or preferred formulary products.
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From page 22... ...
The P&T committee, chaired by a physician and representing the medical staff, is an important element in the legal authorization of formulary system actions that could affect clinical care, such as therapeutic interchange (Liang et al., 1988~. GENERIC SUBSTITUTION Pharmaceutical equivalents are defined as drug products that have the same active ingredient~s)
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From page 23... ...
Experience with generic substitution provides reassurance that safe and effective clinical care can be obtained with suitable therapeutically equivalent generic drug products. Laws and regulations that recognize this in one way or another have been enacted in virtually every state.
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From page 24... ...
estimated that generic substitution saved $8 billion to $10 billion on retail pharmacy drug purchases in 1994. THERAPEUTIC INTERCHANGE Therapeutic interchange involves substitution of therapeutic alternates, that is, replacing a patient's drug that is not on the formulary with one that is, in order to gain increased compliance with the formulary and its objectives.
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From page 25... ...
To eliminate any possible confusion, the committee decided to accept this definition and refer to drugs with different chemical structures that are exchanged in therapeutic interchanges only as therapeutic alternates. In developing its evaluations of equivalence in generic substitution, the FDA uses "therapeutic equivalence" to describe the clinical effects of interchange of pharmaceutical equivalents, that is, generic substitution, not the exchange of therapeutic alternates, that is therapeutic interchange (FDA, 1999a)
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From page 26... ...
The provision of a nonformulary exceptions process is the rule in formularies that are closed or partially closed and allow therapeutic interchange (Hoechst Marion Roussel, 1998, Kreling et al., 1996, VHA Directive 97047~. A smoothly functioning nonformulary exceptions process assists implementation of clinically appropriate exceptions to interchange, as noted below.
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From page 27... ...
was created, and agreements between VA hospitals and medical schools were begun (Fonseca et al., 1996~. As discussed earlier, P&T committees developed slowly beginning in the 1930s coincident with the American College of Surgeons' promulgation of standards for hospital pharmacy (1936)
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From page 28... ...
nonfederal hospitals with a well-controlled formulary and 74.5% with therapeutic interchange programs. Although a group of VA facilities might decide to implement a formulary jointly (Kittel et al., 1978)
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Differences in drug acquisition costs presumably explain the presence of therapeutic interchange programs in 76% of VA hospitals. These exchanges are implemented to affect drug use and cost as reported by Crawford and Santell (1994~.
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From page 30... ...
Coincident with the formation of VISN formularies, the VA Pharmacy Benefits Management Strategic Healthcare Group was established in September 1995 and developed over the course of FY 1996. The VA PBM is located both in Washington, D.C., and outside Chicago and is staffed primarily by pharmacists.
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From page 31... ...
~ ~ , I VA ;~ \, VISN Clinical ~ LAVISH Formulary | 1 Service Manager r ILL Committee I Local P&T Committee Medical Staff ~ ~ Pharmacy /^ VISN ~ <:Formulary J FIGURE 1.1 Reorganization of the Veterans Health Administration. MAP = medical advisory panel; PBM = pharmacy benefits management organization; P&T = pharmacy and therapeutics; VA = Department of Veterans Affairs; and VISN = Veterans Integrated Service Network.
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From page 32... ...
VISN formularies ranged from 74 to 100% conformity, that is, in 16 of the 22 VISNs, from 1 to 5 of the 19 agents were incorrectly included, excluded, or restricted by the VISN formulary. There may be price differentials or local preferences among one or more members of a closed class listed in the National Formulary.
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From page 33... ...
Although recommendations from the MAP, VISN Formulary leaders, and VA PBM are routinely followed, authority to change the National Formulary rests formally with the Pharmacy Benefits Management Executive Steering Board. This board was established by VHA Directive 97-047, but to date has not been created.
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From page 34... ...
The MAP is charged with developing and coordinating disease state management practices that integrate quality clinical care and cost-effective drug therapy. By considering most frequently occurring conditions in the VHA and those with the top drug expenditures (which include hypertension, diabetes, coronary artery disease, hyperlipidemia, chronic obstructive pulmonary disease, congestive heart failure, prostate cancer, depression, psychosis or anxiety, and peptic ulcer disease, among others)
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From page 35... ...
13% of drug expenditures in FY 1999 (GAO, 1999~. Some VISNs have pur chasing agreements that influence prescribing and dispensing in addition to the obligations from the National Formulary listings and National Acquisition Center (NAC)
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From page 36... ...
. To supplement the information here about the VA National Formulary, VISN formularies, and local formularies, or formulary systems, a detailed description can be found in the first GAO report on this subject, VA 's Management of Drugs on Its National Formulary (GAO, 1999)
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