LCDR Marisol Martinez, PharmD Fort Sam Houston, TX

1. A Peek at the PEC: An Overview of Formulary Management at the Department of Defense (DoD) TRICARE Management Activity (TMA) Pharmacoeconomic Center (PEC) LCDR Marisol Martinez, PharmD Fort Sam Houston, TX

2. Objectives • Discuss the Department of Defense (DoD) TRICARE pharmacy benefit and the role and responsibility of the PEC in formulary management • Discuss the lessons learned from the DoD P&T process for conducting drug class reviews to determine clinical and cost effectiveness • Review the functions of the Pharmacoeconomic Outcomes Research Team (PORT) and the implications of formulary decisions on military treatment facilities (MTF)

3. Outline • TRICARE Pharmacy Benefit • Roles of the PEC • Process Timeline • Determining Clinical Effectiveness • Determining Cost Effectiveness • Functions of the PORT • Implications of P&T’s decisions • Conclusion • Questions

4. TRICARE Pharmacy Benefit Background • Points of service • MTF • Retail • Mail Order • Population – 9.7 million beneficiaries • Active duty, retired Uniformed Service members, and family members • Expenditures – $7.5 billion dollars • Uniform Formulary Rule • P&T Committee mandated by Congress

5. TRICARE Formulary

6. TRICAREPharmacy Benefit – Points of ServiceFY09 *Normalized based on 30-day supply of medications

7. The PEC Staff

8. Responsibilities of the PEC • Evaluate the clinical and cost effectiveness of drug therapy to support the DoD P&T Committee formulary decision-making process • Implement and maintain the DoD pharmacy benefit • Assess the outcomes of drug therapy to improve patient care and provide a feed-back loop for the DoD P&T Committee

9. Process Timeline

10. Drug Class Selection • High expenditures across Military Health System (MHS) • “20/80 Rule”: 20% of the drugs comprise 80% of the expenditures • Market competition within a class • Expiration of existing DoD or DoD/VA contracts • Impending generic competition • Newly approved drug likely to impact existing class

11. Drug Class Selection • November 2010 P&T meeting • Januvia and Onglyza • Rationale • Not previously reviewed • Significant cost to the DoD • Increased utilization • Safety concerns • Clinical guidelines

12. Process Timeline

13. Clinical AnalysisReview Process • Team Approach • Drug Class Review • Key Questions • Background • Efficacy • Safety • Tolerability • Other Factors • Formal Presentation • Utilization and Spend • PEC Recommendations

14. Clinical AnalysisEvidence Based Medicine • Goal • Use the best quality evidence when determining differences within the drug class

15. Clinical AnalysisEvidence Based Medicine • Januvia and Onglyza Evidence • No meta-analysis or systematic reviews • Relied on randomized controlled trials for efficacy and safety • Head-to-Head trial

16. Head-to-Head TrialSaxagliptin vs Sitagliptin • 18 week, Phase 3b, MC, DB, non-inferiority trial • Saxagliptin 5mg OR Sitagliptin 100mg • Stable metformin doses (1500-3000mg/day) • Primary endpoint •  from baseline A1c • Non-inferiority concluded if upper limit of 2-sided 95% CI of the A1c difference between treatments was <0.3% • Secondary endpoints • % of patients achieving A1c < 6.5% and 7% •  from baseline FPG, insulin, C-peptide, proinsulin, HOMA-2 • Diabetes Metab Res Rev 2010;26;540-549.

17. Saxagliptin vs SitagliptinResults SE = standard error • Diabetes Metab Res Rev 2010;26;540-549.

18. Clinical AnalysisProvider Input • Developed by the clinical evaluation team • Sent via email using web survey tool • Questionnaire • Physicians • Pharmacists • Other healthcare providers • Summarized responses presented to the P&T Committee • Missing input from civilian network providers • Januvia and Onglyza: Email Invites > 500, Responses 443

19. Survey: Non-Insulin Anti-Diabetic Agents: To what extent do you agree or disagree with this statement: "In order to treat the majority of y ...

20. Economic Analysis Relative Cost-Effectiveness • Two broad types of economic analyses • Pharmacoeconomic Analysis • Evaluates the outcomes and costs of interventions designed to improve health • 4 types • Budget Impact Analysis (BIA) • Accounts for costs associated with a decision • Estimates the likely impact (use and cost) of a formulary decision over 2-3 years

21. Types of Pharmacoeconomic Analysis • Cost-Minimization Analysis (CMA) • Treatments are equally effective • Cost is only factor • Cost-Effectiveness Analysis (CEA) • Outcomes vary but can be expressed in a common unit • Combines clinical benefits with cost efficiency • Cost-Utility Analysis (CUA) • Costs and consequences of different interventions in terms of the patient’s health-related quality of life and survival time • Cost-Benefit Analysis (CBA) • Compares the net costs of a health care intervention with the benefits as a result of applying that intervention

22. $3.00 Retail $2.50 Retail Retail Retail $2.00 $2.00 $1.75 $1.55 $1.50 MTF MTF MTF $1.00 $1.00 $0.50 MTF $0.00 Drug B (1 of 1 UF) Drug B (1 of 2 UF) Drug B (1 of 2 UF/BCF) Drug A CMA Results Cost ($)/Day Weighted average cost for all 3 POS standardized to drug A market share (46% MTF; 30% RET; 24% MAIL)

23. Economic Analysis Decision Criteria Rejection threshold Cost NO MAYBE Increase Acceptance threshold Worse Better Effect Decrease MAYBE YES

24. Process Timeline

25. Pharmacy Outcomes Research Team (PORT) • Co-located in DC and San Antonio • 3 pharmacists • 2 pharmacoeconomists • Data analyst • Technical writer • Improve the outcomes of drug therapy and enhance the quality of the TRICARE pharmacy benefit • Support the DoD P&T Committee and assess the effects of formulary changes on DoD beneficiaries

26. “First-line Use”: New Antidiabetic UsersNo Antidiabetic Rxs Prior 12 Months, Combos w/ Parent Agents • X12 • New metformin users represent 17% of all metformin users • Note: This method counts individuals who received an Rx for a given drug or drug class during a given month (e.g., Jul10) but NOT during the previous 12-month period (e.g., Jul 09 to Jun10); all POS

27. “First-Line” Use of DPP-4s • 93,661 unique users Jul 09 – Jun 10 • Estimated new users per year (n) • No antidiabetics at all, last 12 months = 5940 • No DPP-4 last 12 months = 35,364 • No DPP-4, had Met or SU, last 12 months = 27,636 • ~22% of new DPP-4 users had no Met or SU last 12 months • Of these, about 1/3 (1788) had antidiabetics other than Met or SU prior to DPP-4s • So, the percent of new DPP-4 users with no prior antidiabetic use is ~17% • DoD Pharmacy Outcomes Research Team

28. Process Timeline

29. DoD P&T Meeting • Uniform Formulary placement • Basic Core Formulary (BCF) additions • Medical necessity criteria for NF drugs • Prior authorization requirements • Quantity limits • Minutes of each meeting include recommendation summaries and supporting documentation

30. DPP-4 InhibitorsRelative Clinical Effectiveness • DoD P&T Committee Recommendation on the Relative Clinical Effectiveness (vote) • Motion: The DoD P&T Committee agrees with the relative clinical effectiveness analysis of DPP-4s as presented

31. BCF DecisionPEC Recommendation • Recommendation • Januvia and Janumet BCF • Justification • Budget impact analysis showed more cost effective when placed on the BCF • Questionnaire results showed preference for a BCF agent • BCF=Basic Core Formulary

32. Medical Necessity vs Prior Authorization • Medical Necessity • Requirement when drugs are made Non-formulary • Five criteria to meet medical necessity • CI, ADR’s, Tx failure, stable patient and unacceptable risk if change to UF drug, no UF alternative • Retail/Mail Order: Fulfilling MN reduces co-pay from $22 (NF) to $9 (UF) • MTF: Fulfilling MN allows pt to receive NF drug at MTF • Prior Authorization • Drug with PA can be in a UF-reviewed class (PDE-5s, biologics for RA), or class not previously reviewed • Assist with ensuring appropriate use NF=Non-formulary MTF=Military Treatment Facility UF=Uniform Formulary

33. Step Therapy • Automated Prior Authorization = Step Therapy • Applies to Retail Network/Mail Order, where computer can look back at patient’s profile • Requires use of preferred agent first, then can try others in the class that are UF • PPIs , BPH drugs, Insomnia • Manual Prior Authorization • When automated PA fails • Physician initiates a call or fills out form

34. Step Therapy Automated review of patient profile. Has the patient previously received the preferred product? Rx pays and is dispensed YES Prescription written Pharmacy processes prescription PDTS checks patient profile NO Rx does not pay Prior Authorization required Or, Patient must try the preferred product

35. Process Timeline

36. The Beneficiary Advisory Panel (BAP)Washington DC • Congress established • Focus on implementation of UF decisions • Enhance transparency to beneficiaries • Members • Active duty family members • Retirees and their family members • 2 clinical experts outside of the DoD • Pharmacist from the US Family Health Plan • Physicians or pharmacists from the TRICARE regional contractors

37. The BAP • Concerns regarding Januvia and Onglyza • Does the Committee consider the mechanism of action when deciding where to place an agent? • Does a patient need to go through step therapy to use metformin in combination? • Can a patient get Janumet without trying a sulfonylurea or metformin first?

38. Process Timeline

39. TRICARE Management Activity (TMA) Director Decision • Dr. Jonathan Woodson • Assistant Secretary of Defense for Health Affairs • Director, TMA • Reviews comments and approves the P&T minutes • After the minutes are approved, the decisions may be made public

40. TRICARE Management Activity (TMA)Signed Minutes

41. Process Timeline

42. Implementation • 30, 60, 90, up to 180 day implementation • Based on level of effort and awareness necessary to make the change • Several things happen • Education • Operations • Prior Authorization edits-testing • Formulary search tool and Epocrates • Monitoring • DPP-4 Inhibitors - 60 day implementation

43. Summary • Review of the TRICARE formulary is important to help manage a $7.5 billion dollar pharmacy benefit • Formulary management is accomplished through a thorough evaluation of efficacy, safety, and cost • The PEC staff assists the DoD P&T Committee with recommendations that provide the greatest value to the Military Health System

44. Questions

45. A Peek at the PEC: An Overview of Formulary Management at the TRICARE Management Activity (TMA) Pharmacoeconomic Center (PEC) LCDR Marisol Martinez, PharmD Email: marisol.martinez@amedd.army.mil