March 07, 2006 13:15 ET

CMS Urged to Reconsider Key Decisions Contained in Draft 2007 Formulary Guidance

The Academy of Managed Care Pharmacy Outlines Issues That Could Thwart Best Practices and Raise Costs

ALEXANDRIA, VA -- (MARKET WIRE) -- March 7, 2006 -- The Academy of Managed Care Pharmacy has issued a letter of comment to the Centers for Medicare & Medicaid Services (CMS) today that outlines its objections and offers suggestions to improve the effectiveness of the CMS Draft 2007 Formulary Guidance.

Six Classes of Drugs

Primary among the Academy's objections is the fact that many of the stipulations outlined in the CMS Draft Guidance are counter to "best practices" normally followed in the private sector. The Academy believes closer adherence to recognized best practices would enhance pharmacy coverage for beneficiaries and achieve greater cost efficiencies for both plan sponsors and CMS. Of key concern is CMS' stipulation that "all or substantially all" of the drugs in the antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant and HIV/AIDS categories continue to be required on all formularies.

In the letter, Judith Cahill, executive director of the Academy, states, "In our view, Part D plans must have the latitude and flexibility to develop the formularies that best fit their patient population needs, accommodate variations in practice patterns and produce sound business structures." The Academy strongly opposes this "six class" requirement. Should CMS retain the special treatment of "the six classes of clinical concern," the Academy requests that the stipulation be applied only to beneficiaries previously stabilized on one of these medications at the time that they become eligible for coverage by a new plan sponsor. Patients beginning therapy on one of these six classes of drugs should be managed in accordance with normal formulary practices. For 2007, CMS has additionally stipulated that a new patient who presents a prescription for one of these medications at the point of sale should be treated as if he/she is currently taking that drug, although it is unknown whether the prescription is for ongoing therapy, another decision with which the Academy disagrees.

Cahill states that although the Academy concurs with CMS' desire to maintain high risk patients on drugs on which they have been stabilized during the 2006 transition to the new benefit structure, this conversion was a unique occurrence and "this volume of newly enrolled beneficiaries will not be seen again." She added, "When CMS mandates that drugs be included on the formulary, the ability to negotiate favorable pricing is eliminated." The Academy urges CMS to revise this section of the guidelines to allow plan sponsors to make the formulary decisions for which they have been given responsibility under the statute.

Additional Areas of Comment

Other topics that the Academy comments upon include disagreement with the CMS practice of checking the validity of formularies by verifying that at least one drug from each of the U.S. Pharmacopeia's Formulary Key Drug Types list is contained on submitted formularies; an advisory that CMS should not base formulary decisions on the assumption that drugs that are commonly used are "appropriate" for Medicare beneficiaries (e.g., COX-2 drugs, previously commonly prescribed, may not be appropriate); and an explanation as to why 90 days is too short a time within which to require plans to review a new chemical entity, stating that such a stipulation is inconsistent with the requirement that all such decisions be based on scientific evidence and standards of practice. The Academy recommends that a more appropriate timeframe would be 180 days to initiate a review, and further, a review of every new chemical entity should not be required (e.g., pediatric drugs or drugs within an excluded therapeutic class).

The entire text of the Academy's letter regarding the Draft 2007 Formulary Guidance appears on its website, under Analysis, Comments and Letters in the Government Relations section.

The Academy of Managed Care Pharmacy (AMCP) is a national professional association of pharmacists and other health care practitioners who serve society by the application of sound medication management principles and strategies to achieve positive patient outcomes. The Academy's 4,800 members develop and provide a diversified range of clinical, educational and business management services and strategies on behalf of the more than 200 million Americans covered by a managed care pharmacy benefit. More news and information about AMCP can be obtained on their website, at

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