MTF Pharmacy Budget Optimization Via Formulary Management

1. MTF Pharmacy Budget Optimization Via Formulary Management Major Wade Tiller, BSC, USAF 08 Jan 2007

2. MTF FormularyObjective • To meet the majority of the clinical needs of the MTF providers and their patients in a cost-effective manner • To direct medication use to preferred agents, which offer a therapeutic or safety benefit, or an economic advantage for use

3. Presentation Outline • MTF preferred POS • Under execution of MTF budget • Projection of potential budget under execution • Identification of drugs for formulary addition • Projection of formulary addition budget impact • Exercise

4. MTFsPreferred Point of Service (POS) • Highest Rx volume • Over 6M 30-day equivalent Rxs/month • Lowest cost • BCF pricing is not extended to Mail Order • Lower cost therapeutic mix • Most managed care POS • UF compliance

5. 30-Day Equivalent RXs MTF Retail Mail Order Data Source: PDTS

6. Average Cost Per 30-Day Equivalent Rx Retail Mail Order MTF Data Source: PDTS

7. MTFs: -89% Mail: +6% Retail: -11% -30% -40% MTFs: -93% Mail: +1% Retail: -21% % NF/3rd Tier By POS30dRxs, All Implemented UF Classes, >6mo NF

8. Optimization of MTF Pharmacy Budget Problem DeJour – Under Execution Variety of Reasons • This presentation examines three: • Top brand-only drugs becoming generically available • Uniform Formulary Decisions (UF) • MTF generated RXs not filled at the MTF

9. Rank Generic Name Expenditures (FY06) % of Total Expenditures 1 SIMVASTATIN $69,428,669 4.52% 2 CLOPIDOGREL BISULFATE $54,809,229 3.57% 7 SERTRALINE HCL $33,593,084 2.19% 8 CETIRIZINE HCL $31,749,947 2.07% 9 FLUTICASONE PROPIONATE $28,249,012 1.84% 15 MELOXICAM $19,407,625 1.26% 19 FEXOFENADINE HCL $15,688,124 1.02% 21 ZOLPIDEM TARTRATE $14,999,622 0.98% 23 AMLODIPINE BESYLATE $14,531,555 0.95% 25 CARVEDILOL $13,574,874 0.88% 30 AZITHROMYCIN $11,887,110 0.77% 33 TERBINAFINE HCL $11,627,225 0.76% 36 SUMATRIPTAN SUCCINATE $10,554,306 0.69% 37 METOPROLOL SUCCINATE $10,322,633 0.67% 47 FINASTERIDE $7,483,242 0.49% 68 PRAVASTATIN SODIUM $5,297,706 0.34% 85 BUDESONIDE $3,891,579 0.25% Totals $357,095,542 23.25% Generic Available (recently) Projected Generic Available in 2007 Recent and Projected New GenericsMTF Expenditures FY06

10. (-2%) (-4%) (-5%) (-7%) (-5%) (-5%) (-23%) (-30%) Cost Per Day By POSAll Implemented UF Classes, >6mo NF

11. RXsMTF Prime Enrolled MTF Retail Mail Order

12. 30-Day Equivalent RXsMTF Prime Enrolled MTF Retail Mail Order

13. ExpendituresMTF Prime Enrolled MTF Retail Mail Order

14. MTF Budget Under ExecutionProjection • Objective: Is to forecast enough in advance, so that action taken will be realized within budget period • Estimate budget impact of new generics • PDTS query, report, and analysis • Estimate budget impact of UF decisions • PDTS query, report, and analysis • Estimate budget impact MTF Rxs leaving the MTF will be addressed later

15. Budget Impact of Generic ZoloftQuery MTF Query

16. Budget Impact of Generic ZoloftReport

17. Budget Impact of Generic ZoloftAnalysis • Factors to Consider: • Generic competition: More manufacturers → ↑ competition → ↓ cost • Generic product exclusivity/FSS Pricing: →↑ time until realize ↓ cost • Follow on products: (omeprazole/esomeprazole, citalopram/escitalopram) → ↓ utilization of generic product • No product support: Once generic, the product is subject to unopposed marketing from brand name competitors → ↓ utilization

18. Budget Impact of TZD UF DecisionQuery MTF Query

19. Budget Impact of TZD UF DecisionReport

20. Budget Impact of TZD UF DecisionAnalysis • Factors to Consider: • Variable of Interest: Utilization or quantity dispensed • Market Growth: Utilization ↑ or ↓; run PDTS report with time element • Market Shift: Movement from agent(s) to other agent(s) • POS Migration: Addition of drug may attract RXs from other POS

21. Identification of Drugs for Formulary Addition • Direct requests from providers • Non-formulary (Special Purchase) requests • Prescriptions by MTF providers for MTF enrolled beneficiaries not filled at the MTF • RXs for MTF enrolled filled outside the MTF (PEC) • RXs by MTF providers filled outside the MTF (MTF) • RXs by MTF providers for enrolled filled outside the MTF (PEC) • #$%&^! • RXs for PTs who filled at least one RX at the MTF filled outside the MTF

22. RXs for MTF Enrolled Filled Outside the MTFQuery PEC Query

23. RXs for MTF Enrolled Filled Outside the MTF Report

24. RXs By MTF Providers Filled Outside MTFQuery MTF Query

25. RXs by MTF Provider Filled Outside MTF For EnrolledQuery PEC Query

26. ECF Class May Add ECF Agent(s) Consider Other Agents if ECF Agent(s) added MTF Formulary Decision Algorithm Drug Considered For MTF Formulary UF Class Yes No Formulary Scheduled For Review Yes No No BCF/ECF Class Yes No Hold Decision Consider BCF Class Must Add BCF Agent Consider Other Agents

27. Projection of Formulary Addition Budget ImpactEstablish Baseline • Determine current utilization of agent • Potential PDTS Queries • RXs from MTF providers for MTF enrolled • RXs filled OPOS for PTs who fill RXs at your MTF • RXs filled OPOS in your area

28. Projection of Formulary Addition Budget ImpactFactors to Consider • Market diffusion of drug over time • Increase in the number of people with a health condition who seek medical care • Example: drugs used to treat erectile dysfunction • Off-label use • Displacement of current agents • Consider estimation of budget impact for a single drug in context of other agents within the therapeutic class

29. Business Objects Reports Options • Request report from PEC Data Management Team • Complete report request form found on PEC web page (http://www.pec.ha.osd.mil/PDTS/pdts_busobj.htm) • Attend Business Objects Training at PEC • Need request from Chief Pharmacy Service and approval of Service consultant • Contact PEC to schedule a date (schedule on web page) • Must have local funding for travel and per diem, no charge for the training • Class runs 1 and ½ days and offers 4 hours CE by ACPE • Contact Roger Williams at roger.williams2@amedd.army.mil

30. ExerciseScenario • Scenario • An MTF provider as forwarded a request to add Lipitor to the local MTF formulary. You are responsible for developing the decision analysis

31. ExerciseSurvey

32. ExercisePart 1 • Discuss your approach for performing the decision analysis. What types of information/analyses you would provide/perform

33. ExercisePart 2 • Ultimately what factors will most influence the decision as whether Lipitor should be added to your local MTF Formulary

34. PECApproach • Patients getting atorvastatin prescriptions in the Retail within 100 miles of XAFB • By strength • Patients getting atorvastatin prescriptions in the Retail within 100 miles of XAFB, who also get at least one prescription filled at XAFB • Patients enrolled to XAFB getting atorvastatin in the retail

35. Atorvastatin RXs in Retail 100 miles XAFBReport

36. Atorvastatin RXs in Retail 100 miles XAFBQuery PEC Query

37. Atorvastatin RXs in Retail 100 miles XAFB Who Filled At Least One RX at XAFBQuery PEC Query

38. Atorvastatin RXs in Retail 100 miles XAFB Who Filled At Least One RX at XAFBResults • PTs with atorvastatin RXs within 100-mile radius of XAFB in 6mo period ≈ 5,700 • Of those patients, how many had at least one RX filled at XAFB in the same 6mo period ≈ 706

39. XAFB Enrolled Getting Atorvastatin in the RetailQuery

40. XAFB Enrolled Getting Atorvastatin in the RetailReport