Virginia Medicaid Preferred Drug Program

							         Status Report on
   Development of a Medicaid
   Preferred Drug List Program
                             Presentation to:
                  The Joint Commission on Health Care




         Patrick W. Finnerty                         May 6, 2003
Department of Medical Assistance Services         Richmond, Virginia
    Presentation Outline


Background


Actions Taken Thus Far


Next Steps




                           2
         2003 Appropriations Act:
    Preferred Drug List (PDL) Program
   Item 325(ZZ.1) of the 2003 Appropriations Act directs DMAS to:
      – Implement PDL program no later than Jan. 1, 2004
      – Seek input from physicians, pharmacists, pharmaceutical
        manufacturers, patient advocates, and others
      – Form a Pharmacy & Therapeutics (P&T) Committee
      – Ensure drugs on the PDL are safe and clinically effective
        before considering cost effectiveness
      – Include several key provisions: 72-hour emergency supply;
        24-hour prior authorization process; expedited review of
        denials; and consumer/provider training and education
      – Report to General Assembly on main design components
   Program must generate savings of $9 million GF in FY 2004, and
    $18 million GF in subsequent fiscal years.
                                                                     3
     2003 Appropriations Act: P&T
      Committee Responsibilities

   The P&T Committee shall recommend to the Department:
     – therapeutic classes of drugs to be subject to the PDL and
       prior authorization requirements
     – specific drugs within each class to be included on the
       PDL
     – appropriate exclusions for medications, including
       atypical anti-psychotics, used for the treatment of serious
       mental illnesses such as bi-polar disorders,
       schizophrenia, and depression
     – appropriate exclusions for medications used for the
       treatment of brain disorders, cancer, and HIV-related
       conditions
     – other appropriate exclusions and “grandfather” clauses
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        PDL Development Process

              All Therapeutic Classes of Drugs

             P&T Committee Recommends Drug
             Classes To Be Subject to PDL & P.A.

      P&T Committee Recommends Drugs Within Each
        Class That Are Clinically Effective and Safe

    Preferred Drugs                 Non-Preferred Drugs
Drugs at or below cost of         Drugs above cost of most
most cost-effective drug          cost-effective drug require
                                              P.A.              5
      Overview of PDL With Reference
     Pricing and Supplemental Rebates

  $80                                              $70
                           Original Price                     Non-Participating Manuf.
  $70                                                        Drug Available through P.A.
                  $56
  $60
  $50                               $38
                         $29
                                                                      Most Cost Effective Drug
  $40
                                            $11
  $30
  $20                    $27              $27                                        $27

  $10                                                                   $22

   $0
                Drug A            Drug B          Drug C       Drug D         Drug E
                                     Final Price         Supp. Rebate

Source: DMAS Staff Illustration                                                                  6
    Presentation Outline


Background


Actions Taken Thus Far


Next Steps




                           7
          Actions Taken Thus Far

   Met with 30+ different interested parties on PDL issues
     – pharmaceutical manufacturers, physicians, pharmacists,
       hospitals, nursing homes, advocacy groups and others
   Submitted status report to General Assembly on April 1
   Solicited nominations from provider associations for
    physicians and pharmacists to serve on the P&T Committee
   Solicited public comments on a draft Request for Proposals
    (RFP) to select a PDL contract administrator; RFP issued on
    May 1
   Established a pharmacy web page at DMAS’ internet site and
    e-mail address for PDL comments/input
     – pdlinput@dmas.state.va.us

                                                                  8
       Members of P&T Committee
          Have Been Selected

      Member                            Background
   Randy Axelrod (MD)             Anthem Chief Medical Officer
   Roy Beveridge (MD)             Oncologist
   Randall Dalton (MD)            Ear, Nose & Throat
   James Reinhard (MD)            Psychiatrist (DMHMRSAS)
   Arthur Garson, Jr (MD)         Dean, UVA Med. School
   Mariann Johnson (MD)           Family Practice
   Eleanor (Sue) Cantrell (MD)    Local Health District Director
   Christine Tully (MD)           Geriatrician, VCU/MCV
   Mark Szalwinski (Pharmacist)   Sentara Health Care
   Gill Abernathy (Pharmacist)    INOVA Health System
   Mark Oley (Pharmacist)         Westwood Pharmacy
   Renita Warren (Pharmacist)     Edloe’s Pharmacies
                                                                    9
      An Initial List of Key Classes of
      Drugs to be Excluded from the
     PDL Program Has Been Developed
    Therapeutic Class Description            Used in the Treatment of

   Insulins                             Diabetes
   Cholinesterase Inhibitors            Alzheimers
   Platelet Aggregation Inhibitors      Clotting Disorders
   Antivirals for HIV                   HIV/AIDS
   Cancer Chemo. Agents                 Cancer
   Anti-convulsants                     Seizure Disorders, Mental Health
   Immunosupressants                    Transplant rejections, Arthritis
   Antiemetics                          Nausea in cancer patients, Aging
   Anti-psychotics, Atypical and        Serious Mental Illness
    Typicals
                                                                             10
    Presentation Outline


Background


Actions Taken Thus Far


Next Steps




                           11
                      Next Steps


   Procure PDL contractor services

   Develop emergency regulations and submit State Plan
    amendment to Centers for Medicare & Medicaid Services

   Provide status reports to the General Assembly at key
    points in development process

   Schedule initial P&T Committee meeting

   Continue to receive input from interested parties

                                                            12
                      Next Steps
                      (continued)

   Incorporate other pharmacy-related prior authorization
    requirements
     – prior authorization for more than 9 unique prescriptions
       in 180 days (non-institutionalized patients) or 30 days
       (institutionalized patients)

   Modify Medicaid Management Information System (MMIS) to
    process PDL and prior authorization-related transactions

   Develop provider/consumer education and training
    program
     – PDL contractor will have major responsibilities

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