Pharmaceutical Manufacturers Formulary and Supplemental Rebate Briefing

1
Pharmaceutical Manufacturers Formulary and
Supplemental Rebate Briefing

• Agency for Health Care Administration
• May 31, 2001Tampa, Florida

2
Legislative Update

• Bob SharpeDeputy Secretary for MedicaidAgency
  for Health Care Administration

3
Pharmacy AppropriationFiscal Year 2001/02

• All Funds
• Continue Current Funding Estimated
  Expenditures 1,316,457,799
• Florida Kidcare Program Lump Sum 434,348
• Drug Price Level Estimated Increase 207,097,447
• Caseload Estimated Increase 368,525,684
• Total Estimated Expenditure For Pharmacy
  1,892,515,278
• SSEC Feb. 2001 Forecast
• Reduction For Formulary And Other
  Issues (213,836,853)
• Reduction For Brand Drug Patent
  Expiration (14,546,498)
• Medicaid Coverage For Working Disabled (April
  2002) 483,111
• Coverage For Women Cancer Treatment (July
  2001) 476,670
• Total Reductions and Other Adjustments (227,423,5
  70)
• All Funding From State and Federal Share of
  Grants Donation TF
• Total Pharmacy Appropriation 1,665,091,708

4
Senate Bill 792

• Creates a Medicaid Pharmaceutical Therapeutics
  Committee
• Members of Committee to be appointed as specified
  in 42 U.S.C. s. 1396r-8
• Governor appoints all members

5
Senate Bill 792 (continued)

• Eleven members
• Four physicians licensed under chapter 458
• One physician licensed under chapter 459
• Five pharmacists licensed under chapter 465
• One consumer representative
• Medicaid participating physicians and pharmacists
  must be represented
• Interests of all segments of the Medicaid
  population must be represented
• At least one member shall represent the interests
  of pharmaceutical manufacturers
• Members will serve two year terms, and can be
  reappointed
• PT Committee appointed per 2000 legislation will
  not exist after June 30

6
Senate Bill 792 (continued)

• Until the new PT Committee is appointed and a
  preferred drug list adopted by the Agency, the
  Agency shall use the existing voluntary preferred
  drug list. Drugs not listed on the voluntary
  preferred drug list will require prior
  authorization by the Agency or its contractor.
• The voluntary preferred drug list will be
  expanded to function as an interim formulary in
  order to have a manageable prior authorization
  system, thereby minimizing disruption of service
  to patients.
• The existing PT Committee (appointed pursuant to
  Chapter 2000-367, Section 72, Laws of Florida)
  will meet to consider expansion of the voluntary
  preferred drug list prior to July 1.

7
Duties of the Pharmaceutical and Therapeutics
Committee

• To recommend a preferred drug formulary pursuant
  to 42 U.S.C. s 1396R-8
• Elect a chairperson and vice chairperson each
  year
• Meet at least quarterly
• Comply with Agency rules
• To extend possible review all drug classes at
  least every twelve months
• Recommend additions to and deletions from the
  formulary
• Assure that their recommendations provide for
  medically appropriate drug therapies for Medicaid
  patients which achieve cost savings contained in
  the General Appropriations Act

8

• Except for mental health related drugs,
  anti-retroviral drugs, and drugs for nursing
  home residents and other institutional residents,
  reimbursement of drugs not included in the
  formulary is subject to prior authorization.
• Formulary drugs are not exempt from 4-brand
  limit, but formulary drugs may be requested by
  pharmacy.

9
State Supplemental Rebate Legislation

• Assures pharmaceutical manufacturers an
  opportunity to present evidence supporting
  inclusion of their products
• Authorizes the Agency to negotiate rebates from
  manufacturers in addition to those required by
  Title XIX of the Social Security Act
• No less than 10 percent of Average Manufacturer
  Price (as defined in 42 U.S.C. s. 1936) or
  federal or supplemental rebate, or both, equals
  or exceeds 25 percent
• Agreement to pay the minimum supplemental rebate
  will ensure consideration of the product for
  preferred drug formulary inclusionhowever
  placement is not guaranteed
• There are no upper limits on the supplemental
  rebates the agency may negotiate.

10
State Supplemental Rebate Legislation (continued)

• Agency decisions will be made on clinical
  efficacy, safety, cost effectiveness and
  recommendations of the PT Committee, as well as
  net price to Medicaid after federal and state
  rebates
• Agency is authorized to contract for rebate
  negotiation services
• Supplemental rebate offers may include cash
  rebates and other program benefits, so long as
  guaranteed savings to the Medicaid program occur
  in the same year the rebate reduction is included
  in the General Appropriations Act

11
Nursing Home Formulary Advisory Committee

• Mandated to study the feasibility of using a
  restricted drug formulary for nursing home
  residents and other institutionalized adults
• Seven members to be appointed by the Secretary of
  Health Care Administration
• Two physicians licensed under chapter 458 or 459
• Three pharmacists licensed under chapter 465,
  from recommendations provided by the Florida
  Long-Term Care Pharmacy Alliance
• Two pharmacists licensed under chapter 465

12
Senate Bill 904

• Supplemental Rebate Negotiations Exempt from
  Florida Sunshine Law
• Just as federal law requires confidentiality of
  average manufacturer price and federal rebates,
  new state legislation extends the same protection
  to the state supplemental rebate process.
• All records pertaining to supplemental rebates
  are confidential and exempt from section 119.07,
  Florida Statutes, and Section 24(a) of Article I
  of the State Constitution.

13
Senate Bill 904 (continued)

• Those portions of meetings of the Medicaid PT
  Committee at which rebates or pricing are
  disclosed for discussion or negotiation are to be
  confidential.
• This ensures that pharmaceutical manufacturers
  will not be placed at a competitive disadvantage
  and the number and value of supplemental rebates
  will increase to the benefit of Medicaid
  recipients and to the state.

14
HCFA Exemption from Best Price Calculation

• Additional rebates paid to states under the terms
  of separate Medicaid drug rebate agreements must
  be excluded by the manufacturer from the
  calculation of AMP and best price. (See HCFA
  release 102, November 15, 2000.)

15
Other Pharmacy Related Initiatives in Senate Bill
792

• Drugs on formulary are not exempt from the four
  brand limit.
• Nursing home residents are now subject to the
  four brand limit.
• Prior authorization to exceed the four brand
  limit must be obtained by the prescriber, except
  for nursing home or those in an institutional
  setting. When prior authorization is approved
  for those patients, such approval is authorized
  for up to twelve months.

16
Other Pharmacy Related Initiatives in Senate Bill
792 (continued)

• The Medicaid drug benefit management program
  shall include initiatives to manage drug
  therapies for
• HIV/AIDS patients
• patients using 20 or more unique prescriptions in
  a 180-day period
• the top 1,000 patients in annual spending.

17
Implementation Timeline

• George Kitchens, R. Ph.Chief, Medicaid Pharmacy
  Services Agency for Health Care Administration

18
Implementation Timeline

• June 1 - June 21, 2001 Rebate negotiation for
  expansion of current voluntary formulary
• June 26, 2001 Conference call with current PT
  committee to review revised formulary
• Rebate negotiations for 10/1/01 formulary
  continue
• July 1 - September 9, 2001 Revised formulary
  implemented
• July 1 - July 30, 2001 New PT Committee selected
• August 1 - December 31, 2001 PT Committee begin
  monthly meetings to review therapeutic categories
• January 2, 2002 PT Committee begins quarterly
  meeting schedule

19
Formulary and Supplemental Rebate Procedures

• Terry Taylor, R.Ph., President Dan Kincaid,
  Vice-PresidentProvider Synergies

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Agenda

• Responsibilities
• Manufacturer
• Provider Synergies
• Process for evaluation
• Timing for meetings
• Pricing proposals
• Clinical reviews
• PT Reviews

22
Program at a Glance

• Save 214,000,000 for FY 2002
• Non-Preferred Drugs subject to PA
• Competitive selection
• Clinical and Financial Value
• Net Cost (rebates and unit price)

23
Manufacturer Responsibilities (Phase I)

• Make sure your company is on our list
• LBrown_at_ProviderSynergies.com
• Provide primary/secondary contact info
• Use handout as guide to required information
• Please register at front desk before leaving
• Adhere to process and timeframes
• Provide your BEST offer first.make sure it has
  complete information

24
Manufacturer Responsibilities(Phase I)
(continued)

• Base your proposal on Federal 1Q2001 data
• Provide list of products for proposal
• Discount amounts Federal Supplemental Total
  rebate per unit rebate by NDC
• Provide the NET rebate per unit do NOT break out
  by Federal and Supplemental

25
Provider Synergies Responsibilities

• Provide for presentation of proposals
• Provide formats
• Proposals
• Contract template
• Drug information
• Drug reviews
• Evaluation of clinical/financial proposals

26
Provider Synergies Contacts

• Contracting Dan Kincaid, Esq.
• Clinical Valerie Taylor, Pharm.D
• Scheduling Lori Brown
• Phone [phone]
• Lbrown_at_ProviderSynergies.com

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Important Dates (Phase I)

• 6/1 Manufacturer contact information due
• 6/5 Forms to manufacturer contacts
• 6/12 Proposals due to Provider Synergies
• 6/7 - 6/21 Proposal review
• 6/21 Initial recommendations
• 6/26 Final review of recommendations
• 7/1 Preferred List implementation begins

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Formulary Drug Selection Process(Phase I II)

• Considerations
• Efficacy (does it work?)
• Safety (do benefits outweigh risks?)
• Potential for abuse
• Side effects (is it tolerated?)
• Dosing (frequency and forms)
• Indications
• Net cost (includes all discounts/rebates)

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Formulary Drug Selection Process (Phase I)

• Process begins 6/1
• Financials completed by 6/21
• Implementation of preferred list 7/1
• Participating manufacturers
• PT review process July, August, September
  continue as needed

30
Formulary Drug Selection Process(Phase II)

• Clinical information to Provider Synergies
• Our clinical area will contact you as needed for
  information
• Reviews done by therapeutic class
• Marriage of clinical financial information
• Value added services

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Summary

• Step 1 Email information from handout to
  Lbrown_at_ProviderSynergies.com by no later than
  6/1, 5 p.m. EST
• Step 2 Provider Synergies will email proposal
  forms to you by 6/5
• Step 3 Proposals are due to Provider Synergies
  by 6/12, 5 p.m. EST

32
Summary (continued)

• Step 4 6/7-6/21, proposal reviews and meetings
  as needed by invitation only
• Step 5 6/21, initial recommendations
• Step 6 6/26, PT Committee review
• Step 7 Preferred List to Consultec/ACS for 7/1
  implementation

33
Summary (continued)

• Step 8
• 7/1, begin phase II
• Implementation begins for Preferred List from
  phase I
• Clinical reviews begin for participating
  manufacturers
• New PT Committee formed in July
• Class reviews July/August/September and continue
  as needed

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Formulary Management and Support

• George Kitchens, R. Ph.Chief, Medicaid Pharmacy
  Services Agency for Health Care Administration

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Prior Authorization

• Hard edit at pharmacy for non-formulary drugs
• Messaging with formulary alternatives
• Pharmacy alerts physician of non-formulary status
  and provides alternatives if available
• Physician calls handled by ACS/Consultec
  pharmacists

37
Therapeutics Consultation Program (TCP)

• Currently handles calls from physicians
  concerning 4 brand cap
• Will also review for formulary compliance during
  these calls

38
Therapeutic Academic Intervention (TAI)

• ACS/Consultec Pharmacists and AHCA field
  Pharmacists
• Reviewing prescribing patterns/ protocols

39
Intensified Benefit Management (IBM)

• Complete review of drug therapy and coordination
  with TAI and PCN

40
Expanded DUR Pharmaceutical Care Network (PCN)

• Network of 150 - 200 community pharmacists
• Supporting physicians in providing clinically
  appropriate, cost effective drug therapy

41
Heritage/Program Integrity
DUR/PrescriberPanel
Physicians
Program Development Disease Management
AHCA Prior Authorizations
PT Committee