CMS Final Guidance Medicare Part D Formulary Plan Review

Executive Summary

This 2007 final guidance outlines how CMS will review Medicare Part D prescription drug benefit plans to ensure their formulary meet Part D standards.

MEDICARE MODERNIZATION ACT 2007 FINAL GUIDELINES — FORMULARIES
CMS Strategy for Affordable Access to Comprehensive Drug Coverage
Guidelines for Reviewing Prescription Drug Plan Formularies and Procedures
1. Purpose of the Guidance 
This paper is final guidance on how CMS will review Medicare prescription drug benefit plans to assure that beneficiaries receive clinically appropriate medications at the lowest possible cost. Two key requirements in the Medicare Modernization Act (MMA) are to assure that drug plans provide access to medically necessary treatments for all and do not discriminate against any particular types of beneficiaries, and to encourage and support the use of approaches to drug benefit management that are proven and in widespread use in prescription drug plans today. The goal is for plans to provide high-quality cost-effective drug benefits by negotiating the best possible prices and using effective drug utilization management techniques. This goal can be achieved through a review by CMS that facilitates appropriate beneficiary access to all medically necessary Part D covered drugs along with plan flexibility to develop efficient benefit designs, thus bringing drug benefit strategies that are already providing effective coverage to millions of
seniors and people with a disability to the Medicare population.
2. Strategic Approach 
A. P & T Committee Review 
We believe that current best practices for P&T committees should be applied when developing and administering P&T committees for the Medicare drug benefit. Incorporating best practice philosophies, along with inclusion of the MMA requirements, allows for a drug benefit that is clinically robust.
The requirements listed below are represented as ?BP? for best practice (or Industry Standard Practice) where they have been drawn from commercial best practices consistent with these nationally recognized P&T guidelines, and are represented as ?MMA? where the requirements support the unique provisions of the MMA.
Membership 
  • P&T committee members must come from various clinical specialties that adequately represent the needs of plans beneficiaries (i.e., include representation of ?high volume specialists? in the standard terminology of the industry). (BP)
  • A majority of the P&T committee members must be practicing physicians, practicing pharmacists or both. (BP)
  • At least one P&T committee practicing pharmacist and one practicing physician must be an expert in the care of elderly or disabled persons. (MMA)
  • At least one P&T committee practicing pharmacist and one practicing physician must be independent and free of conflict with respect to the plan and pharmaceutical manufacturers. (MMA)

 

Conflict of Interest
  • P&T committee members should sign a conflict of interest statement revealing economic or other relationships with entities affected by drug coverage decisions that could influence committee decisions. (BP)
Meeting Administration
  • P&T committee should meet on a regular basis, and not less frequently than on a quarterly basis. (BP)
  • P&T committee decisions regarding formulary development or revision must be documented in writing. (BP)
Formulary Management
  • P&T committee must review for clinical appropriateness, the practices and policies for formulary management activities, such as prior authorizations, step therapies, quantity limitations, generic substitutions and other drug utilization activities that affect access. (BP)
  • Formulary management decisions must be based on scientific evidence, and may also be based on pharmacoeconomic considerations that achieve appropriate, safe and cost effective drug therapy. (BP)
  • The P&T committees will be required to establish and document procedures to assure appropriate drug review and inclusion. (BP)
  • Clinical decisions by the P&T committee should be based on scientific evidence and standards of practice, including peer reviewed medical literature, well-established clinical practice guidelines and pharmacoeconomic studies as well as other sources of appropriate information. (BP)
  • Drugs? therapeutic advantages in terms of safety and efficacy must be considered when selecting formulary drugs and placing them into formulary tiers. (MMA)
  • The P&T committee will make a reasonable effort to review a new chemical entity within 90 days, and will make a decision on each new chemical entity within 180 days of its release onto the market, or a clinical justification will be provided if this timeframe is not met. These timeframes also include the review of products for which new FDA indications have been approved. We set this timeframe in response to public comment on our proposed guidance for 2006, but note that plans must make access to new drugs available to enrollees when medically appropriate via exceptions processes even before this deadline. (BP)
  • P&T committee will approve inclusion or exclusion of the therapeutic classes in the formulary on an annual basis. (MMA)
  • Formulary therapeutic categories and classes may be changed only at the beginning of each plan year or when new drugs or new drug therapeutic uses appear. (MMA)
Formulary Exceptions
  • P&T committees must review for clinical appropriateness protocols and procedures for the timely use of and access to both formulary and non-formulary drug products. A nonformulary drug may be needed, for example, when the formulary drug would cause adverse effects or would not be as effective or both, based on scientific evidence or medical necessity. (BP)
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