The 131st Annual Meeting (November 15-19, 2003) of APHA

The 131st Annual Meeting (November 15-19, 2003) of APHA

5054.0: Wednesday, November 19, 2003 - 9:12 AM

Abstract #59723

Pharmacy benefits in the veterans healthcare system: Fundamentals of management and lessons learned over five years

Peter Glassman, MBBS, MSc1, Marie Sales, PharmD2, Fran Cunningham, PharmD2, Michael Valentino, RPh2, and CB Good, MD, MPH3. (1) Division of General Internal Medicine (111G), Department of Medicine, VA Greater Los Angeles, 11301 Wilshire Blvd, Los Angeles, CA 90073, 310-268-3254,, (2) VA Pharmacy Benefits Management Strategic Healthcare Group, VA PBM, Hines IL, Bldg 37, Room 139 (119-D), Hines, IL 60141, (3) Department of Medicine (111), Pittsburgh VAMC, University Drive, Pittsburgh, PA 15240

Background: The Department of Veterans Affairs (VA) Pharmacy Benefits Management Strategic Healthcare Group (PBM) manages the formulary for the entire VA system which serves over 3.5 million veterans and provides over 100 million prescriptions per year. National formulary management entails developing disease state management guidelines, drug class monographs, drug use criteria and contracting. Monitoring specific medications is also performed.

Objective: To describe management and monitoring methods concerning pharmacy benefits, prescribing practices, and non-formulary access across VA.

Methods: The VA PBM has used an evidence-based approach to develop 15 disease management documents, 20 drug and drug class monographs and 30 drug use criteria documents. The PBM has also utilized various contracting methods to standardize generic agents as well as specific drugs/ drug classes, such as antihistamines, ACE inhibitors, alpha-blockers, and HMG-COA (statins) for the National Formulary. Through a pharmaceutical database, developed by the PBM, tracking of outpatient prescribing across the VA, data management and outcomes research was performed. The PBM has worked with RAND Corp (a non-profit think tank) to develop and implement two provider surveys.

Results: The PBM has helped the VA consolidate 170 individual formularies into a single standardized National Formulary. Competitive contracting has yielded an estimated overall cost avoidance of approximately 1 billion dollars since 1996. This cost savings occurred as VA drug expenditures went from slightly over $1 billion in 1996 to nearly 2.9 billion dollars in 2002. Even so, cost per 30 day prescription has remained stable at approximately $13 per month. Provider surveys indicate general acceptance of the National Formulary and have yielded important information on physician workload, access to medications and non-formulary policy. Two independent assessments of VA PBM have been completed, one each by the Institute of Medicine and the Government Accounting Office, and have supported the principles underlying the VAs pharmacy benefits management program and its formulary management system.

Conclusion: The VA experience may serve as a model for states and other large/complex healthcare systems that require pharmacy benefits management.

Learning Objectives:

Keywords: Public Health Administration, Health Care Managed Care

Related Web page:

Presenting author's disclosure statement:
I have a significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.
Relationship: I am employed by VA as a physician

Financing the provision of pharmaceuticals: Drug Policy and Pharmacy Services Contributed Papers #2

The 131st Annual Meeting (November 15-19, 2003) of APHA