Posted on: Monday, April 4, 2005

MILITARY UPDATE

By Tom Philpott

Congress five years ago approved a Defense Department plan to slow pharmacy cost growth by creating a uniform drug formulary (a list of drugs and their uses) for the military, and by imposing higher co-payments on drugs knocked off the list as too expensive and no more effective than other medicines.

Finally, the process of identifying these "nonformulary" drugs has begun.

The first two are likely to be Teveten, a heart medication with only 2,200 known military users, and Nexium, a heavily marketed drug to treat acid reflux and peptic ulcers, and used by more than 137,000 beneficiaries.

Over time, the formulary review process should encourage hundreds of thousands of beneficiaries to switch to more cost-efficient medicines. But officials said they intentionally made their first recommendations modest to avoid affecting too many beneficiaries before they understand the process.

A drug shifted to nonformulary status can't be dispensed on base unless it is prescribed by a staff physician and the patient can show medical necessity. Nonformulary drugs remain available through the

TRICARE Mail Order Program and the TRICARE retail network, but for a higher co-payment.

For mail order, the charge is $3 for a 90-day supply of a generic drug, $9 for a formulary drug and $22 for nonformulary. The same tiers exist for the retail network, but the co-pays cover only 30 days of medication.

The Defense Department's Pharmacy and Therapeutics Committee studied research data and found that Teveten had no significant advantages over the other drugs and was less cost-effective.

The second class reviewed is proton pump inhibitors, or PPIs, for treatment of acid reflux disease and peptic ulcers. Five PPIs are on the formulary. One is an over-the-counter drug called Prilosec, Zegerid or other, generic names. Four PPIs — Prevacid, Aciphex, Protonix and Nexium — require a prescription. The committee found all five have the same clinical effectiveness, but Nexium is most expensive.

Dr. William Winkenwerder, assistant secretary of defense for health affairs, will make final decisions on formulary changes. To help him, the law that authorized the uniform formulary also created a Beneficiary Advisory Panel to review Pharmacy and Therapeutics recommendations and to comment.

At its first public meeting in Washington, D.C., on March 23, the panel endorsed shifting the two drugs to nonformulary status. But a majority disagreed with the committee's call to move Teveten off the formulary 30 days after a final decision, and Nexium after 90 days.

The panelists were told that military pharmacy costs are nearing $5 billion a year. About 6.4 million beneficiaries had 100 million prescriptions filled in 2004.

In June, the beneficiary panel will hold a second meeting to review recommendations for four more classes of drugs.

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