Opinions regarding the Academy of Managed Care Pharmacy dossier submission guidelines: results of a small survey of managed care organizations and pharmaceutical manufacturers

BACKGROUND: In recent years, there has been more emphasis on determining the total value of a drug product, which includes safety and efficacy information and clinical and economic value relative to other therapies. The Academy of Managed Care Pharmacy (AMCP) Format for Formulary Submissions was intended as a tool to assist health care providers in evaluating and selecting drug products. OBJECTIVE: The purpose of this research was to gain the perspectives of a sample of managed care organizations (MCOs) and pharmaceutical manufacturers regarding the AMCP Format submission and evaluation process, as well as their comments on possible future direction for these guidelines as an important part of the formulary decision-making process. METHODS: A random sample of large (>1 million lives) and small (<1 million lives) MCOs was generated using telephone numbers from the National Directory of Managed Care Organizations' database. Pharmaceutical manufacturer respondents were identified from the Pharmaceutical Research and Manufacturers of America (PhRMA) Foundation's Health Outcomes Committee. Telephone interviews were conducted by 2 researchers between September 2004 and October 2005. Respondents from both pharmaceutical manufacturers and MCOs nationwide were familiar with the AMCP dossier preparation and review process, allowing us to compare perspectives from each group. The interview was designed to assess the following key areas: economic models, organizational burden, confidentiality, overall value, and future expectations. RESULTS: Representatives from 20 MCOs and 7 pharmaceutical manufacturers completed the interview; 21 MCO representatives refused to participate, citing company policy. Nearly all (87.5%) of the MCO personnel contacted reviewed dossiers within their organization. However, MCO respondents indicated that only 40% of all drugs they reviewed included dossiers from the manufacturers. For drug evaluation at the level of the pharmacy and therapeutics committee, we found that drugs were compared with a variety of products, with 11 respondents reporting comparisons with a placebo, and all respondents reporting a comparison with at least 1 other branded product. On average, 53.5% of the dossiers MCOs received included budget-impact models, and 39.3% included cost-effectiveness analyses (CEAs) or cost-benefit analyses. Of the dossiers with economic models, less than half (46.2%) were deemed adequate. Nearly two thirds of MCO respondents reported that they modified the provided model with their own population statistics, as many reported that manufacturers do not make models directly applicable to their health plan population. The perspectives of the pharmaceutical manufacturers varied dramatically from the MCO respondents with regard to the inclusion of economic models. Five of the 7 respondents indicated that their companies always included an economic model in the submitted dossiers. One respondent indicated that 85% of company dossiers included models, and another reported that 50% of dossiers included CEA models. Both MCOs and pharmaceutical manufacturers commented that organizational burden was high, with 70% of both groups reporting the use of outside consultants to assist in the dossier process. CONCLUSIONS: Overall, findings for this study suggest that awareness of the AMCP Format is high among MCOs and pharmaceutical manufacturers, but aligning objectives between the 2 organization types is necessary. Conceptually, proving a drug value beyond what the U.S. Food and Drug Administration requires is a reasonable request, something most respondents agreed on. However, less than half of all drugs reviewed had a dossier. In contrast to MCO respondents, pharmaceutical manufacturers appear to have a more positive outlook on the role of the AMCP Format in effectively communicating the value of a new drug product. Further steps need to be taken to improve acceptance and integration of the AMCP Format.     

Focusing pharmacoeconomic activities: reimbursement or the drug life cycle?

The purpose of this paper is to consider the role of pharmacoeconomic activities in the drug life cycle and not just as activities to support reimbursement applications and market entry.These activities are important in establishing the value case for a drug product to both internal and external audiences. Unless these activities are fully integrated into establishing the business case for a product from the pre-phase I period of drug discovery, manufacturers run the risk of establishing a unit price for the product and claims for cost-effectiveness which are inconsistent with achieving reimbursement. Importantly, manufacturers need to consider at an early stage the evidentiary and analytical needs for product evaluation under formulary submission guidelines (AMCP; NICE) and the integration of pharmacoeconomic activities over the life cycle. These activities include justifying assumptions for business opportunity assessments and an early commitment to developing a mock reimbursement submission at post-phase II. The integration of pharmacoeconomic activities in the drug cycle is not only an antidote to excessive clinical optimism but also provides the basis for an effective assessment of the likely performance of new products in the health-care market place at a price and formulary position acceptable both to the manufacturer and the reimburser.     

Focusing pharmacoeconomic activities: reimbursement or the drug life cycle?

Summary

The purpose of this paper is to consider the role of pharmacoeconomic activities in the drug life cycle and not just as activities to support reimbursement applications and market entry.These activities are important in establishing the value case for a drug product to both internal and external audiences. Unless these activities are fully integrated into establishing the business case for a product from the pre-phase I period of drug discovery, manufacturers run the risk of establishing a unit price for the product and claims for cost-effectiveness which are inconsistent with achieving reimbursement. Importantly, manufacturers need to consider at an early stage the evidentiary and analytical needs for product evaluation under formulary submission guidelines (AMCP; NICE) and the integration of pharmacoeconomic activities over the life cycle. These activities include justifying assumptions for business opportunity assessments and an early commitment to developing a mock reimbursement submission at post-phase II. The integration of pharmacoeconomic activities in the drug cycle is not only an antidote to excessive clinical optimism but also provides the basis for an effective assessment of the likely performance of new products in the health-care market place at a price and formulary position acceptable both to the manufacturer and the reimburser.     

Application of economic analyses in U.S. managed care formulary decisions: a private payer's experience

BACKGROUND: Promoting use of pharmaco-economic models by formulary reviewers is a goal of the Academy of Managed Care Pharmacy (AMCP) Format for Formulary Submissions, but relatively few decision makers use such models, and many doubt that they provide meaningful input. OBJECTIVE: To demonstrate how sophisticated disease-based pharmaco-economic models can aid formulary decision makers when long-term outcomes data are lacking. METHODS: The Center for Outcomes Research (CORE) Diabetes Model (CDM), a published, validated Markov pharmaco-economic model that projects clinical and economic endpoints, was used to model the cost-effectiveness of exenatide, a new injectable antidiabetic agent that enhances glucose-dependent insulin secretion, in a standard cohort of type 2 diabetes patients (mean body mass index [BMI] = 27.5 3 kg/m2), compared with a modified obese cohort (mean BMI = 35 3 kg/m2) that was otherwise demographically identical at baseline to the standard cohort. The standard cohort was assumed to maintain baseline weight during treatment, and the modified obese cohort was assumed to experience weight loss of approximately 9% (mean = 3 kg/m2), with corresponding improvements in blood pressure, low density lipoprotein cholesterol, and triglycerides. We selected a 30-year time horizon because it was the time interval during which the CDM predicted most of the subjects would have died, and the costs obtained thus reasonably projected lifetime total direct medical costs for these cohorts. While treatment options certainly will change over a 30-year period, our goal was to estimate the incremental effect of exenatide over other available therapies. RESULTS: The model predicted reduced long-term treatment costs in obese patients, driven by an 11% decrease in cardiovascular disease burden and derived from the presumed weight loss. The incremental cost-effectiveness ratio (ICER) for adding exenatide over 3 years was 35,000 dollars/quality-adjusted life-year (QALY). Using a 30-year horizon, ICER values were 13,000 dollars/QALY versus insulin, 32,000 dollars versus generic glyburide, and 16,000 dollars versus no additional treatment. Exenatide dominated pioglitazone. By comparison, the 30-year ICER for exenatide versus insulin in the nonobese cohort was 33,000 dollars. These results were presented to the pharmacy and therapeutics (P&T) committee and influenced its decision to add exenatide to the drug formulary. While our modeling assumed certain patient characteristics (e.g., obesity, need of further A1c reduction at baseline, motivation to lose weight), the P&T committee imposed only a step-therapy requirement to try either metformin or a sulfonylurea before trying exenatide and did adopt a nonspecific requirement for physician reauthorization of refills before the fourth pharmacy claim for exenatide. CONCLUSIONS: Disease-based pharmaco-economic models may help third party payers project costs and be particularly useful when only data from short-term clinical trials are available. In the present case, the pharmacy staff of a health plan used a pharmaco-economic model for drug treatment of type 2 diabetes provided by the manufacturer as part of the AMCP Format dossier process to project cost outcomes for exenatide, adjunct injectable therapy for patients taking metformin and/or sulfonylurea. The P&T committee approved the drug for inclusion in the drug formulary based in part on the results of the pharmaco-economic model produced from the cost inputs entered into the model by the health plan pharmacists.     

Information provided by generic and brand-name pharmaceutical manufacturers in response to a request

Aim To assess the medical information provided by manufacturers in response to a specific request, and to compare the responses between generic and brand-name companies. Setting Community pharmacy in Spain. Method A systematic request for product monographs was made between 1999 and 2002 to manufacturers registering new medicines in Spain. A standardised letter was sent to the medical affairs departments. If there was no reply after 3 months, a second standardised letter was sent requesting the monograph. Blood derivatives, intravenous medicines, and radiological contrast agents were excluded. Main outcome measures The delay that occurred in receiving information and the type of material sent in response to the request was compared between the two types of companies. Results About of 833 medicines from 185 manufacturers were registered during the time period studied. After applying exclusion criteria, 805 medicines, including 419 (52.0%) generic and 386 (48.0%) brand-name products, were analyzed. No replies were received for 242 (30.0%) requests 183 (43.7%) generics and 59 (15.3%) brand-names; P < 0.005). We received 369 (65.5% of 533) replies after the first request: 140 of 236 (59.3%) generics and 229 of 327 (70.0%) brand-names (P = 0.009). The average response delay was 9.7 days [CI95%: 8.65–10.68]. There was a statistically significant difference between generic and brand-name companies after the first request (P = 0.001), but not after the second request (P = 0.312). Conclusion Brand-name manufacturers reply more often, more quickly, and with better quality information than generic manufacturers.     

Drug product management in health maintenance organizations.

A national mail survey of drug product management in health maintenance organizations (HMOs) is described. The survey covered 570 HMOs--502 by questionnaires mailed to pharmacy directors at individual independent and multistate HMOs and 68 represented by six executives of multistate HMOs who agreed to report aggregate data for their HMO operations. Responses for 180 individual HMOs were received (36% response rate); four of the six multistate HMO executives returned aggregate data. Individual HMO respondents reported using the following methods of drug product management: formularies, 66% (of these, 60% reported using a restrictive formulary or a restrictive formulary with exceptions); MACs, 54%; prior authorization, 44%; contracts for co-marketed and single-source drug entities, 46% for each. Almost all HMOs with contracts also had exclusive or preferred status for dispensing or reimbursement of some drug products. Most HMOs received discounts, manufacturer's value-added services, price protection, rebates based on market share, and rebates based on use as contract incentives; discounts and rebates based on use were chosen as the most preferred incentives. Established methods of drug product management, such as formularies and MACs, were most commonly reported by HMOs; however, nearly half reported using new approaches, including contracts with manufacturers, incentives, such as discounts and rebates based on use, and exclusive or preferred status.     

Formulary submission guidelines for Blue Cross and Blue Shield of Colorado and Nevada. Structure, application and manufacturer responsibilities

From 1 January 1999, all requests by pharmaceutical manufacturers and others to Blue Cross and Blue Shield (BCBS) of Colorado and Nevada for the listing of new pharmaceutical products or any proposed change to the formulary status of an existing product must be accompanied by a submission which meets the informational and analytical standards set out in the BCBS Guidelines for Formulary Submissions for Pharmaceutical Product Evaluation. These submission requirements relate both to the anticipated therapeutic impact of a new product and to claims made as to its anticipated pharmacoeconomic impact. The guidelines have been developed because BCBS is concerned that decisions to admit a drug to formulary have been based in the past on incomplete information. In order to rectify this situation (and to meet quality control objectives), it has been decided that all submissions to BCBS should meet a common information standard that describes both the characteristics of the product and its expected impact in a disease or therapeutic area. Unlike guidelines that have been introduced in countries such as Australia and the Canadian Province of Ontario, these guidelines take an explicit systems approach to the case a manufacturer must make before a product is considered for formulary listing. While the notion of systems impact requirements is not new, this is the first time that a managed healthcare system in the US has adopted this explicit perspective and notified manufacturers that traditional pharmacoeconomic evaluations may not meet the information needs of drug purchasers. The purpose of this paper is to describe the BCBS formulary guidelines and to demonstrate how manufacturers are expected to meet the information needs of a systems impact perspective in submissions to the pharmacy and therapeutics committee.     

Total formulary review--the easy way

In an effort to minimize drug costs, many hospital pharmacy services have limited their drug inventories through the development of a formulary. Evaluation of drug products for addition to the formulary is the responsibility of the Pharmacy and Therapeutics (P & T) Committee. The deletion of rarely used or outdated products is often overlooked. As a means to "clean up" the formulary, Hamot Medical Center (HMC) underwent a total formulary review. Drugs were separated into classes as defined by the American Hospital Formulary Service (AHFS). Approximately three drug classes were evaluated each month by the P & C Committee. Evaluation criteria was based on the following factors: current formulary status, usage statistics, negative comments appearing in six current publications, hospital acquisition cost, and number of formularies containing each product. A final compilation of all deletions and additions were distributed to all medical staff department and division chiefs. Following receipt of all their comments, a final draft of the formulary was made and prepared for publication. This system is a simple, uncomplicated means of either revising or beginning a formulary. It evaluates a drug based on efficacy, individual hospital usage, and cost of the drug while allowing for input of the medical staff. The end result is a formulary tailored to best fit each institution.     

Evaluating a restrictive formulary system by assessing nonformulary-drug requests

Nonformulary-drug requests were used to evaluate a restrictive formulary system in a large university hospital, and a telephone survey of eight similar hospitals was conducted to assess the restrictiveness of their formulary systems. Nonformulary-drug requests were evaluated by two drug information pharmacists over a 12-month period (January-December 1984) to assess the frequency with which nonformulary items were ordered, the costs associated with the procurement of nonformulary drug products, and the rationales given by physicians when ordering nonformulary products. Of all nonformulary requests, 65% were for drugs previously evaluated by the pharmacy and therapeutics committee and denied admission to the formulary. A cost savings of $1887 would have resulted if formulary alternates had been used instead of nonformulary products. Excluding 22% of nonformulary items that were requested for the continuation of preadmission drug therapy, only 13% of the rationales for the remaining requests were appropriate. Although the eight other hospitals surveyed said they had restrictive formularies, all had frequent requests and procedures for procuring nonformulary items and some formularies included most available drugs. The formulary system at the study hospital was considered restrictive, but procedures for nonformulary-drug requests limited the effectiveness of the system. If any benefit is to result from formulary systems, hospitals must strengthen their enforcement of formulary restrictions.     

Pharmacy costs associated with nonformulary drug requests.

Pharmacy costs associated with handling nonformulary drug requests were studied. Data for all nonformulary drug orders received at a university hospital between August 1 and October 31, 1999, were evaluated to determine their outcome and the cost differential between the nonformulary drug and formulary alternative. Two sets of data were used to analyze medication costs: data from nonformulary medication request forms, which allowed the cost of nonformulary drugs and their formulary alternatives to be calculated, and data from the pharmacy computer system, which enabled actual nonformulary drug use to be captured. Labor costs associated with processing these requests were determined through time analysis, which included the potential for orders to be received at different times of the day and with different levels of technician and pharmacist support. Economic analysis revealed that the greatest cost saving occurred when converting nonformulary injectable products to formulary alternatives. Interventions were least costly during normal business hours, when all the satellite pharmacies were open and fully staffed. Pharmacists' interventions in oral product orders resulted in a net increase in expenditures. Incremental pharmacy costs associated with processing nonformulary medication requests in an inpatient setting are greater than the drug acquisition cost saving for most agents, particularly oral medications.     

The regulatory framework of biosimilars in the European Union

In the European Union (EU), the regulatory policy for biosimilars has enabled different biosimilar products to be marketed through an abridged application, which allows the applicant to submit a reduced dossier. Nevertheless, some manufacturers of biological products that share some characteristics with copies have opted for a full application; therefore, the number and extent of clinical studies required in these cases is increased. Here, we focus on a comparison of recombinant human erythropoietin medicinal products. We analyse and discuss clinical studies submitted to the European Medicines Agency that relate to available biosimilars and biological medicinal products that are authorised with a full dossier. We also discuss the issues of interchangeability and substitution, given that the EU allows each Member State to set their own substitution policies.     

Physician attitudes toward human growth hormone products.

A national survey of the attitudes of physicians toward the selection of human growth hormone products and factors affecting physicians' prescribing decisions was conducted. A survey was mailed to 800 pediatric endocrinologists. Recipients were asked to rank eight qualities of human growth hormone therapy from a patient's perspective, to rate the importance of each of 15 factors to the prescribing of human growth hormone products, and to respond to a hypothetical clinical situation set up to assess opinions on the interchangeability of human growth hormone products. The physicians were also asked whether they thought all human growth hormone products were clinically equivalent and, if so, whether a formulary should be limited to one brand of product for all indications. The net response rate was 29%. Physicians ranked insurance coverage and out-of-pocket expenses as the most important factors from the patient's perspective and reported efficacy, patient comfort or compliance, insurance coverage, and drug cost as the most important factors to consider when selecting a human growth hormone product; patient preference was reported to be the least important. A total of 209 physicians (92%) considered all human growth hormone products to be clinically equivalent; not quite half of these favored limiting a formulary to one brand of product. Concerning the hypothetical situation, 210 of 226 (93%) respondents indicated that they would not switch all patients receiving one product (product A) to another product (product B) and 192 of 223 (86%) that they would not switch all patients receiving product B to product A. A national sample of pediatric endocrinologists agreed on the clinical equivalence of most human growth hormone products but not on limiting a formulary to one brand of product.     

Orphan drug development is progressing too slowly

AIMS: To assess the methodological quality of OMP dossiers and to discuss possible reasons for the small number of products licensed. METHODS: Information about orphan drug designation and approval was obtained from the website of the European Commission-Enterprise and Industry DG and from the European Public Assessment Reports. RESULTS: Out of 255 OMP designations, only 18 were approved (7.1%). Their dossiers often showed methodological limitations such as inappropriate clinical design, lack of active comparator where available and use of surrogate end-points. CONCLUSIONS: The paucity of European incentives for manufacturers and the poor documentation underpinning the applications may have limited the number of new OMP. The over 5000 rare diseases awaiting therapy are an important public health issue.     

Results of our national survey. Current formulary decision-making strategies and new factors influencing the process

Formulary recently conducted a survey of 2,000 of its readers to uncover what forces are at play in their formulary decision-making processes. Topics included general philosophies toward formulary decision making, philosophies toward adding and deleting products, influences on the process, trends related to product reviews, formulary management strategies, drug information educational strategies, and new approaches to the formulary decision-making process. Some 295 surveys (14.75%) were returned. Highlights and analyses of the survey findings are presented for your review and comparison with your practice setting's approaches.     

Use of ampicillin-sulbactam before and after formulary inclusion

The use of ampicillin-sulbactam before and after the product was formally placed on a hospital formulary is described. In October 1987 the pharmacy and therapeutics committee at an acute-care institution granted ampicillin-sulbactam temporary formulary inclusion on the condition that its use be audited. Formal inclusion was to be based on the results of this preinclusion audit. A second audit was to be performed if formal inclusion was granted. The data were collated after each audit, and for each patient an infectious-disease consultant proposed an alternative antimicrobial regimen representing what would probably have been prescribed had ampicillin-sulbactam not been available. Sixty-four patients received the product during the six-month preinclusion audit period. Ampicillin-sulbactam was given to 37% of the patients for indications listed in FDA-approved labeling. The dosage was considered appropriate in 88% of the patients. Clinical outcome was considered successful in 84% of the patients who received the product for known infections. Therapy with ampicillin-sulbactam was less expensive (by $4125) in 35 patients and more costly (by $1523) in 29 patients; the projected annual savings were $7805. After formal inclusion on the formulary, ampicillin-sulbactam was prescribed for some 700 patients over a 16-month period. A review in 49 patients showed appropriate indication and dosage for 63% and 84% of the patients, respectively, and an 84% rate of therapeutic success. The extrapolated cost savings were $26,429 per year. After formulary inclusion, the use of ampicillin-sulbactam increased, as did the frequency of its use for indications appearing in FDA-approved labeling.     

A survey of the use and educational value of the hospital formularly manual

The medical and nursing staffs of two affiliated hospitals were surveyed on their frequency and purpose of use of their hospital's formulary manual. A numerical rating of the perceived educational value of the manuals was also requested. Twenty-two per cent (141/650) of those surveyed completed their questionnaires. Ninety-six per cent of the respondents indicated use of the formulary manuals at least once a month; 62% used the manuals at least once a week. The frequency and character of use of various sections of the formulary manuals are presented. The perceived educational value of the manuals was rated 3 or greater on a scale of 1 (no value) to 5 (greatest value) by 80% of the respondents. The hospitals' formulary manuals are frequently referred to for various types of drug information. The professional staffs perceive the formulary manuals to be educationally valuable sources of drug information. Reasons for the low rate of response to the survey are presented. A plan of how to increase the response rate in a planned future survey is also presented.     

Activities, functions, and structure of pharmacy and therapeutics committees in large teaching hospitals.

The results of a survey on the activities and functions of hospital-based pharmacy and therapeutics (P&T) committees are presented. Questionnaires were mailed to the pharmacy director or the person responsible for the pharmacy's drug information service at 267 teaching hospitals throughout the United States in 1994 and 1995. The survey questions covered P&T committee composition, functions, roles of members, policies and procedures, and formulary-maintenance activities. The overall response rate was 70%. The mean number of members on the P&T committees was 19.3, of whom 91% were allowed to vote. There was an average of 12.3 physicians on the committees. Each P&T committee had at least one pharmacist member, with an average of 3.2 pharmacist members; 69.5% of the institutions reported having a committee secretary, who was almost always a pharmacist. On almost all committees, pharmacists wrote the minutes, prepared the formulary review documents, and were responsible for monitoring formulary activities outside the meeting. The P&T committee functioned in a very formal manner. Most (87.7%) of the respondents reported that their institutions had a closed formulary. At all hospitals, the attending medical staff could request additions to the formulary, but at only 62.4% of the hospitals could pharmacy staff make a similar request. The committees were active in changing the formulary. P&T committees in large teaching hospitals are active in formulary management, are large and diverse, and consist mainly of physicians, although pharmacists play an important role in the meetings.