Status Report on Development of a Medicaid Preferred Drug List Program

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Status Report on Development of a Medicaid
Preferred Drug List Program

• Presentation to
• PDL/PA Implementation Advisory Group

Cynthia B. Jones, Chief Deputy Director Department
of Medical Assistance Services
September 11, 2003 Richmond, Virginia
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Presentation Outline
Background Actions Taken Thus Far Next Steps
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Medicaid Coverageof Prescription Drugs

• Prescription drug coverage is an optional benefit
  that all state Medicaid programs provide.
• In Virginia, this coverage is provided through
  fee-for-service and managed care programs.
• The focus of this PDL program is on the 220,000
  clients that are in the fee-for-service program.
  These clients live in areas of the State that
  currently do not have a managed care organization
  available or who are excluded from managed care
  (such as persons in nursing facilities, community
  based waiver programs, and foster care).
• The 300,000 Medicaid recipients in one of the
  five managed care programs are already subject to
  a preferred drug list or similar program.

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Fee-For-Service (FFS) Pharmacy Costs Have
Increased 89 Since 1997
Annual FFS Pharmacy Costs (Millions)
Net of drug rebates
Source Statistical Record of the Virginia
Medicaid Program
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FFS Pharmacy Costs As A Percentage of Total
Medical Costs Is Increasing
FFS Pharmacy Costs As A Percentage of Total
Medical Costs
Source Statistical Record of the Virginia
Medicaid Program
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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 (PT) 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.

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2003 Appropriations Act PT Committee
Responsibilities

• The PT 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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Additional Responsibilities of PT Committee
(contd)

• Conduct clinical reviews of preferred and
  non-preferred drugs as needed to maintain the PDL
• Conduct clinical reviews of new drugs
• Provide advice to DMAS and Contractor on clinical
  issues regarding all aspects of the PDL program,
  including the prior authorization process for
  non-preferred drugs
• Provide clinical advice/input to DMAS and
  Contractor on prior authorization of more than 9
  unique prescriptions

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DMAS Responsibilities

• Ensure PDL program conforms to all
  statutory/regulatory requirements
• Support PT Committee Members and activities
• Procure services of a PDL Contractor
• monitor Contractor and ensure performance meets
  required quality and service standards
• Review and approve all Contractor-written
  communications to clients, providers, and others
  prior to release
• Provide Contractor with all necessary and current
  client eligibility and utilization data
• Coordinate Contractors support of PT Committee
• ensure Contractor is responsive to PT Committee

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DMAS Responsibilities(contd)

• Interpret policies and make final decisions
  regarding all aspects of program
• Appropriations Act requires that DMAS establish a
  process for acting on the recommendations of the
  PT Committee and documenting any decisions that
  deviate from recommendations of the Committee
• Review and approve all supplemental rebate
  agreements
• Handle all media inquiries

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PDL Contractor Responsibilities

• Provide information and staff support to the PT
  Committee
• Establish and maintain the PDL based on clinical
  recommendations of the PT Committee
• cost effectiveness is to be considered only after
  drug is determined to be safe and clinically
  effective
• exclude from the PDL and prior authorization
  program for non-preferred drugs those classes of
  drugs previously excluded by DMAS
• Manage the reference pricing process
• Ensure all program components required by the
  Appropriations Act are implemented
• Negotiate and administer state supplemental
  rebates

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PDL Contractor Responsibilities(contd)

• Administer the PDL prior authorization program
  for non-preferred drugs and the prior
  authorization program for more than nine unique
  prescriptions
• administer a reconsideration and appeals process
• Provide and maintain Call Center 24 hours/day 7
  days/week
• Provide PDL and prior authorization program
  education services for clients and providers
• Ensure confidentiality of client/provider
  information

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PDL Development Process
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Overview of PDL With Reference Pricing and
Supplemental Rebates
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Non-Participating Manuf. Drug Available through
P.A.
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Source DMAS Staff Illustration
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Presentation Outline
Background Actions Taken Thus Far Next Steps
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Actions Taken Thus FarP T Committee Activities

• The Secretary of Health and Human Resources
  solicited nominations from provider associations
  for physicians and pharmacists to serve on the
  PT Committee
• The Secretary appointed eight physicians and four
  pharmacists to the PT Committee
• The PT Committee has met four times June 18,
  July 30th, August 12th, and September 3rd.
  Additional monthly meetings will be scheduled
  throughout the year.

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Members of PT Committee

• Member Background
• Randy Axelrod (MD) (Chairman) Anthem Chief
  Medical Officer
• Roy Beveridge (MD) Oncologist
• Avtar Dhillon (MD) Psychiatrist (CSB)
• 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
• (Vice Chairman)
• Gill Abernathy (Pharmacist) INOVA Health System
• Mark Oley (Pharmacist) Westwood Pharmacy
• Renita Warren (Pharmacist) Edloes Pharmacies

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Actions Taken Thus Far P T Committee
Activities

• The initial PT meetings will determine which
  drugs will be part of the PDL program during the
  January 2004 implementation.
• Future meetings will determine the drugs that
  will be part of the PDL program implemented in
  April and July of 2004.
• The goal of this phased-in transition process
  is to minimize the impact of the program on
  clients and providers.

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Initial List of Key Classesof Drugs to be
Excludedfrom the PDL Program

• Therapeutic Class Description
• Insulins
• Cholinesterase Inhibitors
• Platelet Aggregation Inhibitors
• Antivirals for HIV
• Cancer Chemo. Agents
• Anti-convulsants
• Immunosupressants
• Antiemetics
• Anti-psychotics, Atypical and Typicals

• Used in the Treatment of
• Diabetes
• Alzheimers
• Clotting Disorders
• HIV/AIDS
• Cancer
• Seizure Disorders, Mental Health
• Transplant rejections, Arthritis
• Nausea in cancer patients, Aging
• Serious Mental Illness

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Actions Taken Thus FarTherapeutic Classes
Reviewed
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Actions Taken Thus Far PDL Contractor

• May 1, 2003 Issued a Request for Proposals to
  select a PDL contract administrator
• May 15th Mandatory Pre-proposal conference held
• June 5th Deadline for submission of proposal
• July 1st Published Notice of Intent to Award
  contract
• July 18th DMAS awarded contract to First Health
• DMAS and First Health are working together to
  define and develop operational aspects of the
  program. FHSC is playing a secondary role to the
  PT Committee.

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Actions Taken Thus Far Enrollment Groups to be
Excluded from PDL Process

• Third Party Liability enrollees
• Hospice enrollees
• PACE and Pre-PACE enrollees
• Qualified Medicare Beneficiaries
• Children who are the responsibility of Juvenile
  Justice
• Refugees that are not covered in a Medicaid group
• FAMIS enrollees

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Actions Taken Thus Far Enrollment Groups to be
Included in the PDL Process

• All other Fee for Service enrollees who receive
  pharmacy services will be subject to the new
  provisions, including
• Medallion
• Aged, Blind, and Disabled
• Nursing facility residents
• Home and Community Based Care Waivers
• Dual Eligibles
• Client Medical Management
• FAMIS Plus Children (formerly called Medicaid)
• Those on Spenddown
• Foster Care Children
• Family Planning Waiver
• Breast and Cervical Cancer Groups

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Actions Taken Thus Far Public Comment

• DMAS has met with over 30 different groups of
  stakeholders to solicit input into the design of
  the PDL program meetings are continuing
• Established a pharmacy web page at DMAS internet
  site (www.dmas.state.va.us) and e-mail address
  for PDL comments/input (pdlinput_at_dmas.state.va.us)
  
• At each PT Committee meeting, time is allotted
  for presentations on the clinical aspects of the
  therapeutic classes under review

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Actions Taken Thus Far Status Reports to the
General Assembly

• Submitted first report on April 1, 2003, which
  provided a general overview of the approach to
  the PDL program.
• Submitted memoranda to Chairmen of the
  Appropriations Committees and the Joint
  Commission on Health Care on June 16th and
  September 1st
• Made several presentations to Joint Commission on
  Health Care and the Health and Human Resources
  Subcommittees of both House Appropriations and
  Senate Finance

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Actions Taken Thus Far PDL/PA Implementation
Advisory Group

• Established a PDL/PA Implementation Advisory
  Group, which includes representatives of
  pharmaceutical manufacturers, providers, and
  advocates
• Purpose To provide advice to the agency
  regarding the implementation of PDL program,
  including the provider and consumer education and
  the prior authorization procedures for both the
  PDL and for more than nine unique prescriptions
• First meeting is scheduled for September 11,
  2003 meeting will be held in the Board Room

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Presentation Outline
Background Actions Taken Thus Far Next Steps
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Next Steps PDL/PA Implementation Advisory Group

• Next Meetings
• Week of October 20th
• Week of December 10th
• Week of January 26th

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Next Steps

• Schedule the remaining PT Committee meetings for
  this year
• Begin supplemental rebate negotiations with
  manufacturers
• 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

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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

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Next Steps(continued)

• Develop provider/consumer education and training
  program
• PDL contractor will have major responsibilities
• PDL/PA Implementation Advisory Group will play a
  key role