Pharmaceutical Manufacturers
Formulary and Supplemental
Rebate Briefing
Agency for Health Care Administration
May 31, 2001
Tampa, Florida
Legislative Update
Bob Sharpe
Deputy Secretary for Medicaid
Agency for Health Care Administration
Pharmacy Appropriation
Fiscal 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:
(227,423,570)
* All Funding From State and Federal Share of Grants & Donation TF
Total Pharmacy Appropriation:
1,665,091,708
2
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
3
Senate Bill 792
– Eleven members:
(continued)
•
•
•
•
•
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
– P&T Committee appointed per 2000 legislation will not
exist after June 30
4
Senate Bill 792
(continued)
• Until the new P&T 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 P&T 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.
5
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
6
• 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.
7
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 inclusion—however placement is not guaranteed
• There are no upper limits on the supplemental rebates the
agency may negotiate.
8
State Supplemental Rebate Legislation
(continued)
• Agency decisions will be made on clinical efficacy,
safety, cost effectiveness and recommendations of
the P&T 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
9
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
10
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.
11
Senate Bill 904
(continued)
– Those portions of meetings of the Medicaid
P&T 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.
12
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.)
13
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.
14
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.
15
Implementation
Timeline
George Kitchens, R. Ph.
Chief, Medicaid Pharmacy Services
Agency for Health Care Administration
Implementation Timeline
June 1 - June 21, 2001
Rebate negotiation for expansion of
current voluntary formulary
June 26, 2001
Conference call with current P&T
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 P&T Committee selected
August 1 - December 31, 2001
P&T Committee begin monthly
meetings to review therapeutic
categories
January 2, 2002
P&T Committee begins quarterly
meeting schedule
17
Formulary and
Supplemental Rebate
Procedures
Terry Taylor, R.Ph., President
Dan Kincaid, Vice-President
Provider Synergies
Agenda
• Responsibilities
– Manufacturer
– Provider Synergies
• Process for evaluation
• Timing for meetings
– Pricing proposals
– Clinical reviews
– P&T Reviews
20
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)
21
Manufacturer Responsibilities
(Phase I)
• Make sure your company is on our list
– LBrown@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
22
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
23
Provider Synergies
Responsibilities
• Provide for presentation of proposals
• Provide formats
– Proposals
– Contract template
– Drug information
• Drug reviews
• Evaluation of clinical/financial proposals
24
Provider Synergies: Contacts
• Contracting: Dan Kincaid, Esq.
• Clinical: Valerie Taylor, Pharm.D
• Scheduling: Lori Brown
• Phone: 513-774-8500
• Lbrown@ProviderSynergies.com
25
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
26
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)
27
Formulary Drug Selection Process
(Phase I)
• Process begins 6/1
– Financials completed by 6/21
– Implementation of preferred list: 7/1
• Participating manufacturers
• P&T review process July, August, September
& continue as needed
28
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
29
Summary
• Step 1: Email information from handout to
Lbrown@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
30
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, P&T Committee review
• Step 7: Preferred List to Consultec/ACS for
7/1 implementation
31
Summary
(continued)
• Step 8:
– 7/1, begin phase II
– Implementation begins for Preferred List from
phase I
– Clinical reviews begin for participating
manufacturers
– New P&T Committee formed in July
– Class reviews July/August/September and
continue as needed
32
Formulary Management
and Support
George Kitchens, R. Ph.
Chief, Medicaid Pharmacy Services
Agency for Health Care Administration
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
35
Therapeutics Consultation Program
(TCP)
• Currently handles calls from physicians
concerning 4 brand cap
• Will also review for formulary compliance
during these calls
36
Therapeutic Academic
Intervention (TAI)
• ACS/Consultec Pharmacists and AHCA field
Pharmacists
• Reviewing prescribing patterns/ protocols
37
Intensified Benefit Management
(IBM)
• Complete review of drug therapy and
coordination with TAI and PCN
38
Expanded DUR Pharmaceutical Care
Network (PCN)
• Network of 150 - 200 community pharmacists
• Supporting physicians in providing clinically
appropriate, cost effective drug therapy
39
Physicians
Patient
P&T Committee