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Comparison of VA National
Formulary and Formularies of the
Highest Enrollment Plans in
Medicare Part D and the Federal

Employee Health Benefit Program

Prepared for:
PhRMA

The Lewin Group, Inc.

December 10, 2008
Comparison of VA National Formulary
and Formularies of the Highest
Enrollment Plans in Medicare Part D and
the Federal Employee Health Benefit
The Lewin Group, Inc.
December 10, 2008
The Pharmaceutical Research and Manufacturers of America asked The Lewin Group to compare the formulary status of drugs commonly used by the Medicare population on the Veterans Affairs National Formulary (VA formulary), the two highest enrollment Medicare Part D plans, and the plan with highest enrollment in the Federal Employee Health Benefit Program (FEHBP). Lewin first completed this analysis in January 2007 using the 2007 versions of the VA formulary, Medicare Part D formularies, and FEHBP formulary. This report provides an update to the 2007 analysis. In addition, we analyzed the tier distribution of the drugs covered on the Part D formularies. Lewin identified the drugs most commonly used by the Medicare population by querying Verispan’s Vector One National Audit (VONA) data to compile the 300 drugs with the highest script volumes for the 65 and older population.1 Nineteen of the top 300 drugs are not covered by the Part D program due to statutory or regulatory requirements.2 We conducted the analysis using the remaining 281 Part D covered drugs. Key Findings
Overall, coverage of the top Part D covered drugs by the VA formulary, FEHBP formulary, and the formularies of the two highest enrollment Medicare Part D plans remains largely unchanged since the 2007 analysis. The FEHBP and Medicare Part D formularies that we analyzed all provide a greater breadth of drug coverage than the VA formulary. Additionally, both of the Part D formularies placed close to 90 percent of the top 281 Part D covered drugs on either tier one or tier two. Exhibit 1 illustrates the number and percent of scripts covered by the VA, FEHBP, and the two Medicare Part D formularies for all of the general drug categories that are captured by the top Part D covered drugs. Exhibit 2 illustrates the formulary status for each of the top 300 drugs. ⇒ Of the 281 Part D covered drugs, 183 (65%) are included in the VA formulary, compared to 273 (97%) in the FEHBP formulary, 278 (99%) in the highest enrollment Part D plan formulary, and 280 (100%) in the second highest enrollment Part D plan formulary. Of the 116 brand drugs among the 281 Part D covered drugs, 51 (44%) are covered by the VA formulary, compared to 115 (99%) covered by the FEHBP formulary, 114 (98%) covered by the highest enrollment Part D plan formulary, and 116 (100%) covered by the second highest enrollment Part D plan formulary. ⇒ The two highest enrollment Part D plans predominantly place the top 281 Part D covered drugs on tiers one or two. Of the 278 drugs covered by the highest enrollment Part D plan formulary, 242 (87%) are on tiers one or two. Of the 280 drugs covered by the second highest enrollment Part D plan formulary, 248 (89%) are on tiers one or two. 1 The script volume for each drug is from the time period of January 2008 through July 2008. 2 The following drugs excluded from Part D coverage: Alprazolam, Aspirin (enteric-coat), Benzonatate, Cheratussin AC, Cialis, Clonazepam, Cyanocobalamin, Diazepam, Docusate Sodium, Ferrous Sulfate, Folic Acid, Levitra, Lorazepam, Phenobarbital, Promethazine/Codeine, Temazepam, Tussionex, Viagra, Vitamin D. The list of Part D excluded drugs was obtained from: www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/R2PDB.pdf. ⇒ Of the 569 million scripts analyzed, 72% of the total and 41% of the brand scripts are covered by the VA formulary. In contrast, 99% of all scripts and 100% of brand scripts are covered by the FEHBP plan. The highest enrollment Part D plan covers 99% of all scripts and 99% of brand scripts and the second highest enrollment Part D plan covers 100% of all scripts and 100% of brand scripts. ⇒ VA formulary coverage varies widely among the drug categories due to the partially closed nature of the formulary; for example, while 76% of all scripts are covered in the largest category (cardiovascular), fewer than half of scripts for ear, nose, and throat and urologic disorders are covered. Methodology
We downloaded the VA’s National Drug File from the VA pharmacy website3 and checked each of the 281 Part D covered drugs against those covered by the VA formulary. Since the VA formulary is organized by generic entity and only includes the names of brand name drugs when they cannot be substituted due to narrow therapeutic index, all matches were based on the generic name of the drug. For example, if the brand name of a drug appears on the list of top drugs and that drug’s generic name is listed on the VA formulary, the brand drug is counted as being on the VA formulary. In some cases, the VA formulary covers only certain strengths or forms of a particular drug (e.g., IV version is covered but the tablets are not covered). In those cases, we looked at the breakdown of script volume by dosage and form for that drug within the VONA data in order to determine how many scripts are covered on the VA formulary and how many are excluded. For the purposes of Exhibit 1, we only counted scripts for a particular drug when those specific formulations (e.g., capsules, extended release version) were covered. In order to determine formulary coverage for Exhibit 2, we used the percent of the VONA scripts for that drug that were actually covered as a proxy for formulary coverage. If more than 90% of the script volume for a particular drug was covered by the VA formulary, the entire drug was considered as being covered on the VA formulary. If less than 5% of the script volume for a particular drug was covered by the VA formulary, the entire drug was labeled as being excluded from the VA formulary. If between 5% and 90% of the script volume for a particular drug was covered by the VA formulary, the drug was labeled as having “some forms” on the VA formulary. Using this methodology, only three drugs4 were labeled as excluded because the VA formulary covered less than 5% of each drug’s script volume. Drugs meeting the “some forms” or “included” criterion were counted as being covered on the formulary. The FEHBP national plan with highest enrollment is the Blue Cross Blue Shield FEP Basic plan. The FEP basic formulary was obtained from the BCBS Federal Employee Program website.5 Similar to the VA formulary, the FEP Basic formulary does not list all the brand name drugs covered, but instead is organized by generic entity. Therefore, we matched drugs on the FEP 3 http://www.pbm.va.gov/NationalFormulary.aspx 4 Protonix, famotidine, and labetalol 5 http://www.caremark.com/portal/asset/feprx_807.pdf Basic formulary to each of the 281 Part D covered drugs based on the generic form of the drug. The FEP Basic formulary generally covers or excludes all forms of a drug, so if a drug was covered on the formulary, we counted all of the scripts for that drug as being covered. According to CMS data, the two highest enrollment Medicare Part D plans based on October 2008 enrollment are the United AARP MedicareRx Preferred Plan and the Humana Standard Plan. The United AARP MedicareRx Preferred formulary and Humana Standard formulary were obtained from each plan’s respective website.6 Unlike the VA and FEHBP formularies, the format of the Part D formularies allowed us to consider whether the brand form, generic form, or both are on formulary. Therefore, for example, we only counted the brand version as being covered if the specific brand name appeared on the Part D plan formulary. If only the generic name appeared on the plan’s formulary, the brand version was not counted as being on the Part D plan formulary. Only one drug, Nitroquick, was excluded from the count of Part D covered drugs due to this different method of counting formulary coverage for the Part D plans. The United AARP MedicareRx Preferred Plan does not cover Nitroquick, however it does cover the generic form of the drug, nitroglycerin. Like the FEHBP formulary, the Medicare Part D formularies generally either cover or exclude all forms of a drug. If a drug was on the Part D formulary, we counted all of the scripts for that drug as being covered. Beyond inclusion on the formulary, the tier assignment of a particular drug can impact its accessibility for the beneficiary. Both the United AARP MedicareRx Preferred plan and the Humana Standard plan use a four tier formulary structure. In multi-tier formularies, drugs placed on tiers one or two are considered preferred generic and brand drugs and have lower cost share requirements than drugs on higher tiers. United AARP MedicareRx Preferred members pay tiered copayments for drugs on the first three tiers and 33% coinsurance for drugs on the fourth tier. Humana PDP Standard members pay 25% coinsurance for drugs across all tiers. While the Humana PDP Standard has a single coinsurance structure, the four tier formulary structure is the same as those used for Humana’s PDP Enhanced and Complete plans and reflects which drugs Humana considers preferred brand and generic drugs. We examined the tier placement of the 281 Part D covered drugs for both of the Part D formularies to see what percent of these top drugs were placed on a preferred tier. 6 United AARP formulary from https://www.aarpmedicarerx.com/online_documents/ovation/pdf/pdp/en/2009/ FLPDP3023174_XAPE002.pdf and Humana Standard formulary from http://apps.humana.com/marketing/documents.asp?file=906360 Exhibit 1: Scripts Covered by the VA, FEHBP, and Two Medicare Part D Formularies, by General Drug Category1
FEHBP with Highest
Highest Enrollment Medicare
2nd Highest Enrollment
VA National Formulary
Enrollment Formulary
Part D PDP
Medicare Part D PDP
Total Scripts
General Drug Category
(in 000s)
% Scripts
% Scripts
% Scripts
% Scripts
Covered (in
Covered (in
Covered (in
Covered (in
Cardiovascular Agents (High Blood Pressure, Heart Disease) Gastrointestinal Drugs (Stomach and Intestine Disorders) Antimicrobials and Infectious Diseases (Infection) Pain and Inflammatory Diseases (Arthritis, Gout) Neurological Drugs (Migraine, Parkinson's Disease, Alzheimer's Disease) Anticoagulants and Hematopoietics (Blood Modifiers) Total - Part D Covered Drugs
Total - Brand Drugs
1 Scripts associated with the following Part D excluded drugs are not included in this exhibit: Alprazolam, Aspirin (enteric-coat), Benzonatate, Cheratussin AC, Cialis, Clonazepam, Cyanocobalamin, Diazepam, Docusate Sodium, Ferrous Sulfate, Folic Acid, Levitra, Lorazepam, Phenobarbital, Promethazine/Codeine, Temazepam, Tussionex, Viagra, Vitamin D. The list of Part D excluded drugs was obtained from: http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/R2PDB.pdf. Exhibit 2: Top 300 Drugs for the 65+ Population by Script Volume, January – July 20081
(highlighted drugs are statutory exclusions from Part D coverage)
2nd Highest
FEHBP with
Estimated
Enrollment Enrollment
National
Medicare
Medicare
Drug Name
Generic/Active Ingredient
Enrollment
Formulary
(in 000s)
(all U.S.)
Formulary
Formulary
Formulary
Tier Status
Tier Status
Amlodipine Besylate/Benaamlodipine besylate/benazepril 2nd Highest
FEHBP with
Estimated
Enrollment Enrollment
National
Medicare
Medicare
Drug Name
Generic/Active Ingredient
Enrollment
Formulary
(in 000s)
(all U.S.)
Formulary
Formulary
Formulary
Tier Status
Tier Status
2nd Highest
FEHBP with
Estimated
Enrollment Enrollment
National
Medicare
Medicare
Drug Name
Generic/Active Ingredient
Enrollment
Formulary
(in 000s)
(all U.S.)
Formulary
Formulary
Formulary
Tier Status
Tier Status
2nd Highest
FEHBP with
Estimated
Enrollment Enrollment
National
Medicare
Medicare
Drug Name
Generic/Active Ingredient
Enrollment
Formulary
(in 000s)
(all U.S.)
Formulary
Formulary
Formulary
Tier Status
Tier Status
1 Number of scripts and sales volume data were obtained from the Verispan Vector One National (VONA) database. VA formulary information was obtained from http://www.pbm.va.gov/NationalFormulary.aspx. The FEHBP with the highest enrollment is the BCBS Federal Employees Program Basic plan. The BCBS FEP Basic formulary was obtained from http://www.caremark.com/portal/asset/feprx_807.pdf. According to CMS data, the highest enrollment Medicare PDP is United AARP MedicareRx Preferred and the second highest enrollment Medicare PDP is Humana Standard. The United AARP formulary was obtained from https://www.aarpmedicarerx.com/online_documents/ovation/pdf/pdp/en/2009/ FLPDP3023174_XAPE002.pdf and the Humana formulary was obtained from http://apps.humana.com/marketing/documents.asp?file=906360. 2 Estimated sales for the 65+ population was based on the average price per prescription for the entire US population multiplied by the number of prescriptions for the 65+ population for that particular drug. 3 If more than 90% of the script volume for a particular drug was covered by the VA formulary, the entire drug is labeled as being on the VA formulary. If less than 5% of the script volume for a particular drug was covered by the VA formulary, the entire drug is labeled as being excluded from the VA formulary. If between 5% and 90% of the script volume for a particular drug was covered by the VA formulary, the drug is labeled as having “some forms” on the VA formulary. 4 The highlighted drugs are not covered by Part D and were excluded from the analysis: Alprazolam, Aspirin (enteric-coat), Benzonatate, Cheratussin AC, Cialis, Clonazepam, Cyanocobalamin, Diazepam, Docusate Sodium, Ferrous Sulfate, Folic Acid, Levitra, Lorazepam, Phenobarbital, Promethazine/Codeine, Temazepam, Tussionex, Viagra, Vitamin D. The list of Part D excluded drugs was obtained from: www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/R2PDB.pdf.

Source: http://www.lewin.com/~/media/Lewin/Site_Sections/Publications/3987.pdf

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