Formulary Decision Making in the United States

Published by: Decision Resources

Published: Mar. 31, 2009 - 27 Pages

Table of Contents

Executive Summary

Strategic Considerations

Stakeholder Implications

Introduction

Identity of Formulary Decision Makers

Academy of Managed Care Pharmacy’s Format for Formulary Submissions

Key Factors in Formulary Inclusion

Key Factors in Tier Placement

Specialty Pharmaceuticals

Outlook and Implications for the Pharmaceutical Industry

Regulation of Generics and Biosimilars

Comparative Effectiveness Research

Changes in Benefi t Design

Coverage of Biosimilars

Pharmaceutical Industry Responses

Figures

1. Health Plans’ Formulary Decision-Making Procedures

2. Health Plans’ Assessment of the Quality of Select Aspects of Manufacturers’ Formulary Submissions

3. Health Plans’ Desired Improvements to Manufacturers’ Formulary Submissions

4. Health Plans’ Assessment of the Utility of Manufacturers’ Formulary Submissions

5. Important Factors in Formulary Decision Making

6. Key Factors in Formulary Decision Making for Hospital Anti-Infectives

7. Key Factors in Formulary Decision Making for Combination HIV Therapies

8. Key Factors in Formulary Decision Making for Rheumatoid Arthritis Biologics

9. Key Factors in Formulary Decision Making for Obesity Therapies

10. Importance of Clinical and Nonclinical Factors to Tier Placement

11. Ranking of Clinical and Nonclinical Factors as Infl uences on Tier Placement

12. Importance of Cost Attributes to Tier Placement

13. Select Health Plan Responses to the Approval of a New Biologic

14. Issues Affecting Reimbursement of Biosimilars

15. Factors Used to Determine Biosimilar Placement on Formulary

16. Formulary Uptake of Biosimilars

Abstract

Introduction

The U.S. pharmaceutical industry is facing the worst combination of pressures in memory—the most severe recession in decades, a dramatic slowdown in pharmaceutical sales, a new U.S. administration intent on slashing healthcare costs, and a host of blockbuster patent expirations. In this exceptionally challenging reimbursement environment, manufacturers must have a thorough understanding of the formulary decision-making process. This report uses data from 13 different surveys to examine how pharmacy and therapeutics (P&T) committees make coverage decisions.

Get the Answers You Need to Shape Your Strategy

• P&T committees are generally entrusted with the responsibility for formulary decision making in the United States. Who are the key players in P&T committees? How frequently do these committees meet, and when do they begin formulary decision making for new drugs? What role do pharmacy benefi t management companies (PBMs) play in decision making?
• In 2000, the Academy of Managed Care Pharmacy introduced the Format for Formulary Submissions, a template for manufacturers’ formulary submissions. How do managed care organizations (MCOs) and manufacturers compare in their opinions regarding the Format’s uptake and value. What changes would MCOs like manufacturers to make to their reimbursement dossiers?
• Efficacy is generally by far the most important factor in formulary decision making. What other criteria carry particular weight with P&T committees? How does formulary decision making vary by indication? What factors have a bearing on tier placement within formularies?
• The reimbursement environment in the United States is expected to undergo dramatic changes in the coming decade. How does the new U.S. administration plan to promote the use of generics and biosimilars? How will government funding for comparative effectiveness research infl uence formulary decision making? How are MCOs likely to respond to the launch in the United States of the fi rst biosimilars? How can the pharmaceutical industry respond to this changing environment?

Scope

• Identity of formulary decision makers: role and composition of P&T committees; frequency of P&T committee meetings; timing of formulary decision making; role of PBMs.
• Academy of Managed Care Pharmacy’s Format for Formulary Submissions: origins and objectives; frequency of use; MCO assessment of the quality and value of submissions based on the Format; common criticisms of manufacturer dossiers.
• Key factors in formulary inclusion and tier placement: most important criteria overall; case studies of hospital anti-infectives, HIV therapies, rheumatoid arthritis (RA) biologics, and obesity therapies; factors infl uencing tier placement; decision making for specialty pharmaceuticals.
• Outlook and implications for the pharmaceutical industry: regulation of generics and biosimilars; comparative effectiveness research; changes in benefi t design; coverage of biosimilars; pharmaceutical industry responses to the changing environment.

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