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.     

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.     

Effect of pharmacists' clinical interventions on nonformulary drug use

The effect on drug costs of pharmacists' interventions in reducing the use of nonformulary medications was studied in a private teaching hospital. During a four-month period, nonformulary medication request forms and pharmacist consultation logs were reviewed to determine physicians' actions taken on requests for nonformulary medications. Cost avoidance of interventions (nonformulary medication cost) and the cost of pharmacist cost) and the cost of pharmacist time for the interventions were determined. The pharmacist was able to contact The pharmacist was able to contact the physician in 388 of 394 instances in which the use of a nonformulary medication was considered. Of 230 recommendations by pharmacists to change a nonformulary drug order to one for a formulary alternative, 64.8% (149) were accepted by physicians. Of pharmacists' recommendations that were accepted, 75.8% (113/149) were from decentralized areas, which was a significantly higher acceptance rate than that for the centralized areas (24.7% or 36/149). Cost avoidance resulting from acceptance of pharmacists' recommendations during the four-month study was $2,645, or $13,573 per year; this was more than the cost of pharmacist time required to perform interventions. Pharmacist interventions to decrease use of nonformulary drugs can be cost-effective and appear to be more successful in decentralized pharmacy service areas than in areas served by a central pharmacy.     

Nonformulary drug requests at an academic hospital in Germany – the role of general practitioners' long-term medication

Objective: To determine the influence of general practitioners' outpatient medication on nonformulary drug requests in university hospitals. Methods: During a period of 1 year every nonformulary drug request at the Göttingen University Hospital was analysed (reason for request, drug class). A second analysis examined whether the introduction of a new order form that allowed the prescribing physician to mark a box to declare that this request is due to general practitioner's outpatient therapy influenced the rate of requests. Results: During 12 months a total of 6,281 nonformulary drugs were ordered from the pharmacy, 1,077 (17.1%) of them because of outpatient medication. The percentage of requests according to general practitioners' outpatient medication was about 11% in both the medical and the surgical departments. The rate was rather high in the departments of psychiatry and orthopaedic surgery (39% and 60%, respectively). With the introduction of the new order form, there was a significant increase in the general practice based rate of nonformulary requests on the general surgical wards (from 10.8% to 19.9%). Only a minority of requests (14%) represented drugs of unproven efficacy. Conclusion: Since nonformulary requests attributable to previous outpatient medication accounts for less than 20% and since only a minor portion of them lack scientific proof of efficacy we suggest that hospital doctors and clinical pharmacologists should avoid a drug policy, which is too restrictive, and support maintenance of chronic medication initiated by general practitioners. Especially in the department of psychiatry, nonformulary requests seem to be justified by patient needs.     

Developing and implementing a statewide formulary system: one state's experience

Prior to the Pennsylvania Department of Public Welfare (DPW) implementing a statewide formulary for its 21 mental health hospitals and mental retardation facilities, each facility had its own drug use policy. In many facilities, drugs were ordered with little or no cost-containment or drug-management consideration. To change drug purchasing and usage policies, a task force was created to develop a state formulary system. The task force appointed a formulary subcommittee to research and make recommendations on issues such as drug selections, formulary substitutions, and nonformulary drug use. The step-by-step process of developing and implementing the Pennsylvania DPW state formulary--including pitfalls and successes--is presented.     

Clinical considerations and costs associated with formulary conversion from tobramycin to gentamicin

The clinical and financial effects of replacing tobramycin with gentamicin on the formulary of a 550-bed teaching hospital were studied. On the recommendation of the pharmacy and therapeutics committee, the formulary aminoglycoside was changed from tobramycin to gentamicin in June 1985; the nonformulary status of amikacin was unchanged. Five weeks later, physician compliance was assessed and the reasons for prescribing nonformulary aminoglycosides were determined. Two four-month-long evaluations were done at 6 and 18 months after implementation to assess patterns of use of nonformulary aminoglycosides. The impact on costs was determined after one and two years by considering use patterns of formulary and nonformulary aminoglycosides, as well as those of third-generation cephalosporins and mezlocillin. Resistance patterns of two gram-negative organisms, Pseudomonas aeruginosa and Serratia marcescens, were assessed for 1982-1987. Finally, the rate of nephrotoxicity in gentamicin-treated patients was determined. During the first five weeks after the formulary conversion, 80.3% (106 of 132) of the aminoglycoside orders received were for gentamicin. After telephone follow-up by the pharmacy department, that figure rose to 93.9%. During the four-month reviews beginning at 6 and 18 months, nonformulary orders accounted for 10.9% and 7.4%, respectively, of the total number of courses of aminoglycosides prescribed. In the majority of these cases, tobramycin and amikacin were used to treat infections caused by organisms with documented resistance to gentamicin or to gentamicin and tobramycin, respectively. No clear-cut changes in resistance patterns for Ps. aeruginosa or S. marcescens could be associated with the formulary conversion.(ABSTRACT TRUNCATED AT 250 WORDS)     

Antipsychotics: how strict the formulary?

Seventeen antipsychotic medications are available in the U.S. Antipsychotic formulary considerations include relative efficacy, individual patient response, relative differences in adverse effects, dosage form availability, blood level monitoring, and generic availability. Chlorpromazine, thioridazine, haloperidol, and fluphenazine are recommended for formulary inclusion based on research and clinical considerations. A recommendation for managing a patient receiving a nonformulary antipsychotic is presented.     

Potential economic effets of a brand standardization policy in a 1000-bed hospital.

The potential economic effects of a brand standardization policy on 50 multiple source, nonproprietary drugs in a 1000-bed hospital which uses a unit dose drug distribution system were studied. Inpatient drug usage cost and inpatient drug inventory cost for the year 1974 were compared under the existing nonformulary system and a simulated formulary system of brand standardization. Drug usage cost was defined as expenditures made by the study hospital for drugs which were administered. Drug inventory cost was defined as the dollar value of drug inventory being stored for use in the hospital. Potential saving in excess of $35,000 for drug usage cost and $9,000 for drug inventory cost could have been realized with a brand standardization policy on 50 nonprietary drugs. The differences in costs were significant at the 0.005 level. It is concluded that a brand standardization policy can be effective means of reducing drug usage cost and drug inventory cost in a large hospital.     

Comprehensive therapeutic interchange program in a community hospital

The implementation of a comprehensive therapeutic interchange program is described. The need to reduce the number of telephone calls to physicians about nonformulary drug orders, reduce drug costs, and maximize the effectiveness of drug therapy prompted the development of an automatic therapeutic interchange program at a 273-bed nonteaching community hospital. Pharmacists and physicians agreed that a telephone call to discuss every nonformulary drug order was unnecessary. The pharmacy department presented the automatic interchange program to the pharmacy and therapeutics committee. The program was reviewed by the committee, the hospital attorney, and medical staff members and was instituted in 1986 for drug products, such as vitamins and antacids, for which interchanges are noncontroversial. A newsletter describing the program was distributed, and inservice education sessions were held. A reminder was placed on order forms that an interchange for nonformulary drugs would be made unless the nonformulary agent was deemed "medically necessary" by the physician. In such cases, the physician is contacted to discuss the therapeutic alternative. As acceptance of the program and cost efficiencies were demonstrated, more controversial agents were phased in during subsequent years. It was difficult to obtain approval to add some agents, such as third-generation cephalosporins, to the program, but noncompliance and confusion have been minimal. An automatic therapeutic interchange program has worked well at this institution since 1986.     

Pharmacoeconomics and formulary decision making

Pharmacoeconomic assessment of formulary actions has become increasingly common in local, national, and international formulary decision making. Tactics for managing medication use include formulary management and drug policies. Pharmacoeconomic data can provide support for these formulary decisions. For example, pharmacoeconomic data can support the inclusion or exclusion of a drug on or from the formulary and support practice guidelines that promote the most cost-effective or appropriate utilisation of pharmaceutical products. Various strategies can be used to incorporate pharmacoeconomics into formulary decision making. These include using published pharmacoeconomic studies and economic modelling techniques, and conducting local pharmacoeconomic research. Criteria for evaluating the pharmacoeconomic literature, suggestions for employing economic models, and suggested guidelines for conducting pharmacoeconomic projects are discussed. Although most formularies are viewed as cost-containment tools, formularies should not be a list of the 'cheapest' alternatives. Today's formulary should contain agents that optimise therapeutic outcomes while controlling cost. Pharmacoeconomic assessments of formulary decisions help to ensure that the agents promoted by our formularies yield the highest outcome per dollar spent. A discussion of the process for formulary action in a US hospital, the influence of pharmacoeconomics on US formularies, and strategies for incorporating pharmacoeconomics into formulary decision making are presented in this paper.     

Decision analysis applied to selection of histamine H2-receptor antagonists for the formulary

The use of decision analysis in selecting a histamine H2-receptor antagonist for the formulary at a hospital in Spain is described. Cimetidine, ranitidine, and famotidine were identified as the possible alternatives. The evaluation criteria established were therapeutic efficacy, adverse effects, drug interactions, years of clinical use, dosage interval, cost, and dosage forms. The relative importance of the criteria was determined by assigning utility values to each. Probability values were assigned to estimate how well each drug met each criterion. By multiplying the utility and probability values for each criterion and summing the scores, a total score was calculated for each drug. The alternative with the highest total score was ranitidine. A sensitivity analysis showed that the results were stable over a plausible range of probability and utility values. Accordingly, ranitidine was selected for inclusion on the formulary. Decision analysis provided an effective method for selecting which histamine H2-receptor antagonist to include on the hospital's formulary.     

P & T Committee interview: Establishing and maintaining a dynamic formulary.

In an exclusive interview with Hospital Formulary, Dr. Stephen Rostand and Mr. Herman Lazarus--the P & T Committee Chairman and Secretary of the University of Alabama Hospital--share their experiences in establishing an effective, functional formulary system. Discussed in this interview are the current activities of this Committee which include: reviewing adherence to an established Committee guideline on an effective antibiotic dosing regimen, creating a more effective adverse drug reaction reporting system, and establishing a computerized program to alert prescribers to the possibility of drug-drug interactions. By their willingness to cooperate, communicate, and remain flexible to medical staff requests, this 15-member Committee has been able to maintain a dynamic formulary.     

Drug usage guidelines, Part 2: Analysis of program outcome

The effect of integrating a Drug Usage Guidelines (DUG) program with a hospital formulary system was analyzed. Significant changes were observed in both the number of requests submitted to the P & T Committee and the number of drugs added to the formulary after implementation of the DUG program. Failure to follow the DUG submission protocol, particularly with respect to the requirement for supportive clinical data from the primary literature, led to delayed consideration and eventual withdrawal of several highly promoted drug products. The initial involvement of physicians in the planning and implementation of the DUG program has been an important factor in the continued success of the program.     

Effect of a pharmacist's and a nurse's interventions on cost of drug therapy in a medical intensive-care unit

The effect of interventions by a pharmacist and a nurse on the cost of drug therapy in a medical intensive-care unit (ICU) was determined. A pharmacist taught cost-avoidance concepts related to medication use to a senior member of the nursing staff. The pharmacist and the nurse documented during a 91-day period all interventions that resulted in a discontinuation or change in drug therapy or involved nonformulary drug requests or serum drug concentration determinations. Costs that were avoided or added as a result of these interventions were determined using drug acquisition costs and (for interventions involving i.v. therapy) the cost of related supplies. Costs were calculated for both the initial 24-hour period after each intervention and the expected duration of therapy. The 345 interventions of the pharmacist and the nurse represented $6,383 in 24-hour cost avoidance and $23,993 in total cost avoidance. The majority of interventions resulted in discontinuation of medications or changes in drug dosage; most of those interventions involved antimicrobial agents. Other frequent interventions involved changes in route of administration and the interchange of therapeutic alternates. A pharmacist and a nurse had a positive impact on the cost of drug therapy in a medical ICU.     

Effect of patient notification of formulary change on formulary adherence

OBJECTIVE: To evaluate the impact of patient notification of impending formulary changes on formulary adherence. METHODS: This pilot program in a large, Midwest-based health insurer utilized a randomized controlled trial research design. A list of 30 chronic-use medications that were to change formulary status were selected for the pilot. A review of adjudicated pharmacy claims records was performed to identify patients receiving one or more of the formulary change medications on the list. Members of 112 individual health plans of this large health insurer, all of whom were subject to the same drug formulary, were randomized to either the intervention (letter) or control arm. Patients in the intervention arm were sent a targeted communication that described the patient.s formulary change medication(s) and provided therapeutic option(s) for the formulary change medication(s). Pharmacy claims for patients in both arms were examined at 110 days after the date of the mailing to determine if there was a switch to a formulary alternative. Multivariate regression modeling was performed to adjust for baseline differences between the arms. RESULTS: A total of 7,247 unique formulary change medication regimens were identified (3,817 in the control arm and 3,430 in the letter arm) for 6,518 subjects (3,387 in the control arm and 3,131 in the letter arm). A higher proportion of formulary change medication regimens in the intervention arm were switched to a formulary alternative compared with the control arm (19.2% vs. 12.0%, P<0.001). After adjustment for baseline differences, regression modeling indicated that subjects in the intervention arm were 1.33 times more likely to switch to a formulary alternative (P<0.001). CONCLUSION: A letter-based, formulary change notification program is a pragmatic and effective strategy to increase drug formulary adherence. Such a program does not restrict access to medications but, rather, provides education and personalized information that may allow patients to participate more actively in their pharmacotherapy decision making.     

Administrative reports for monitoring pharmacy purchasing

The use of administrative reports in a hospital pharmacy department to monitor communication regarding drug supply problems and to assist pharmacy administration in assessing the performance of its purchasing area is described. The weekly drug supply problems report was developed as a method to communicate problems in the storeroom to other pharmacy areas. The weekly borrow and loan report, which accounts for all borrow and loan transactions, helps determine the proper reorder quantities of drug products borrowed frequently and monitors repayment for loaned items. The inventory assessment report is prepared annually; in this report, drug expenditures for a "market-basket" list of drug products are compared for the current and previous years. To assess the use of nonformulary drugs, a quarterly report of expenditures for nonformulary drugs is compiled. The purchasing pharmacist, who is responsible for inventory control, prepares these reports. When considered in relation to the budget and workload statistics, the reports can be used to assess the performance of the purchasing area. Increased accountability and more orderly operation of the purchasing area has accompanied the use of these reports.     

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.