Contemporary challenges and novel strategies for health-system formulary management

Contemporary challenges and novel strategies for health-system formulary management drug information, formularies, hospital, pharmacy and therapeutics committee The 2008 ASHP “Guidelines on the Pharmacy and Therapeutics Committee and the Formulary System” noted that designation of a formulary medication should reflect a determination that the medication is “appropriate for routine use” (emphasis added) in a particular patient population.1 Many health systems and hospitals have adopted a slightly altered definition of a formulary medication (i.e., a product readily available or stocked within the pharmacy). Indeed, this altered definition seems to have been adopted in other ASHP guidelines.2 In the decade since the publication of the ASHP guidelines on formulary system management,1 the environment surrounding hospital pharmacies has changed dramatically. The cost of pharmaceuticals, the types of newly approved medications, and the stipulations related to the reimbursement or procurement of medications have all been significantly altered. Outpatient clinic services, often supplied by hospital pharmacies and their associated formulary systems, have also been affected by these changes, albeit often in a slightly different manner than in the inpatient setting. This altered climate presents a growing number of reasons that the concept of a formulary medication should be uncoupled from that of a regularly stocked or routinely used product. Current challenges. The traditional definition of a drug formulary continues to describe an appropriately inclusive system. However, the existing standards for evaluation of a drug for formulary addition no longer accurately reflect the factors that must be considered. Procurement and regulatory restrictions are of growing concern, and economic considerations have expanded significantly. In addition, the safety and regulatory risks associated with many of these medications emphasize the need to use additional formulary strategies that facilitate medication use and improve patient safety for all medications regardless of frequency of use. Pricing. Prescription drug expenditures are now responsible for as much as 20% of total healthcare spending in the United States.3–6 These price increases are largely driven by specialty drugs, which are expected to account for 44% of all drug spending in 2017. Similarly, orphan drug spending is projected to more than double by 2022 to represent more than 20% of all prescription drug sales.7 In addition to the growing number of specialized and high-priced therapy options on the market, 4 of the top 10 prescription drugs have increased in price by more than 100% since 2011. Each of these changes to the medication landscape contributes to a tangible financial impact on hospital pharmacies and healthcare systems.8 These increasing costs are clearly prohibitive for hospital pharmacies attempting to employ the traditional approach of routinely stocking all formulary medications within the institution. For cases in which high acquisition cost is the sole prohibitive factor, a handful of creative solutions to circumvent the concept of routine stocking can be considered. Products that are not required emergently or are not needed during inpatient stays may not need to be regularly stocked and can be ordered individually for each scheduled patient or dose. Thus, advance scheduling and restrictions on setting of care (e.g., inpatient versus outpatient) during use can be implemented. A recent example of such a product is eteplirsen, an i.v. medication used for the treatment of Duchenne muscular dystrophy.9 The mechanism of action of eteplirsen limits its efficacy to a small number of patients with specific gene mutations, which discourages regular stocking of the drug due to its rare indication for use. However, with an average wholesale price (AWP) of $8,000 per 500-mg vial,10 the provision of clear guidance on appropriate situations for procurement and administration will be critical to cost containment. For those higher-priced products that are needed for emergent uses, such as antidotes and blood factor products, alternative stocking systems, including consignment contracts and regional sharing between institutions, can be considered. The expense of a lost, damaged, or expired vial of a high-cost medication can now exceed the expense of a pharmacist full-time equivalent per year. Indisputably, regularly stocking such high-cost and infrequently used medications is not advisable. Thus, ancillary formulary management functions, such as issuance of guidelines and criteria for use, may prove vital to cost containment for such products, particularly those not intended to be stocked consistently. Reimbursement. In addition to the clear limitations associated with high acquisition costs, some medications are now subject to strict reimbursement practices of insurance companies; these could include limiting reimbursement to outpatient use only, with no allotted reimbursement if a drug is administered during an inpatient admission. A timely example is nusinersen, an intrathecal injection used to treat spinal muscular atrophy.11 The AWP of nusinersen is $150,000 per dose,10 which may not be reimbursed when the drug is administered to hospitalized patients. The costs and benefits of administration of such high-cost medications in care settings in which optimal reimbursement is not assured must be closely evaluated and monitored. National and local coverage determinations are increasingly including high-cost medications.12 These documents, available from the Centers for Medicare and Medicaid Services, will need to be evaluated for relevant medications when determining formulary status or criteria for use. Some high-cost medications are eligible for additional inpatient reimbursement (i.e., payment beyond what is obtained from a diagnosis-related group payment) to compensate for the increased cost of treatment. The new technology add-on payment for defibrotide, for example, helps alleviate the high cost of inpatient administration, but the expense must be appropriately coded and billed at the time of use.13 These payment mechanisms can represent significant revenue but are likely to go unused due to their unusual and insurer-specific nature. Health systems with a mix of 340B Drug Pricing Program–eligible and 340B-noneligible facilities may also identify a drastic difference in costs between facilities. This disparity may create a compelling reason to restrict the use of high-cost medications to those hospitals or clinics that are designated 340B-eligible facilities. The logistic and ethical aspects of this practice must be heavily considered, as the cost avoidance can be very great (e.g., more than $25,000 per dose of nusinersen). Lastly, as many health systems have become the consolidated source of all aspects of medical care, including the insurance provider, relative costs must be weighed across the board. For example, the use of phenylephrine–ketorolac injection, which is administered during cataract surgeries, may increase revenue for a clinic in comparison to the use of generic epinephrine.14 This increased revenue, however, comes at the expense of the insurance provider. In a health system that is both the clinic provider and the insurer, the higher revenue for the clinic does not represent increased value for the health system. This scenario may instead increase the overall cost to the health system if use of the alternative medication also entails a high acquisition cost for the clinic. As the focus on larger health-system costs has expanded, these considerations have become important during formulary evaluations. Availability. Price is not the only, or even the primary, point of concern related to the increasing number of specialty and orphan products on the market. There are a number of new restrictions in relation to the ways that medications can be prescribed, obtained, and dispensed. These manufacturer-, insurer-, and/or government-enforced restrictions have permanently altered the traditional concept of medication stock. Drug shortages have also presented significant challenges within formulary systems.15 In-depth analyses of the causative factors and management strategies for such shortages have been addressed previously15–18 and are therefore excluded from this discussion. A number of medications on the market are now restricted to acquisition via “patient supply.” In some cases, these restrictions are entirely insurance based. Such restrictions most commonly occur in the setting of outpatient infusions. For instance, in place of the hospital pharmacy purchasing and billing for the medication in question, insurance companies may mandate the use of medications shipped from a contracted mail-order pharmacy, a practice commonly referred to as white-bagging. Risk evaluation and mitigation strategy (REMS) restrictions, enforced by the Food and Drug Administration, can also limit the way that medications are prescribed, purchased, and supplied. In the case of vigabatrin, an oral medication used for specific forms of epilepsy, all doses past the 5-day initiation period must be shipped directly to the patient.19 This obstacle necessitates the use of the patient’s own medication during hospital admissions. In other situations, such as with daclizumab (a drug indicated for the treatment of relapsing multiple sclerosis), REMS requirements limit availability to pharmacies that have been specially certified to dispense the medication.20 Pharmacy certification of this type can range from straightforward and easy to complex and implausible for most health-system pharmacies. Finally, several medications for rare diseases may only be purchased by a hospital pharmacy from a specialty pharmacy pursuant to a specific patient requirement. Thus, the medication cannot be routinely stocked and must be ordered once a patient has already been admitted or is scheduled for admission. Carglumic acid, an oral product indicated to treat N-acetylglutamate synthase deficiency, is an example of a drug subject to this form of procurement restriction.21 The procurement and availability concerns in each of these cases imply operational quandaries that are not encountered with medications that are ordered and stocked by the institution. Straightforward tasks such as ensuring the adequate and timely supply of products become confusing, difficult, and time-consuming. In addition, guidance to ensure appropriate preparation and administration or compliance with third-party restrictions and requirements may not be readily available for nonformulary items. Such guidance is often provided as ancillary formulary information, presenting an argument for addition of such items to the formulary regardless of ability to procure and stock a medication. Specialization and inconsistent use. The concerns associated with high-cost and highly restricted products extend beyond the operational considerations of procurement and stocking. The specialization of these products often implies a large amount of regulation, as well as a high-risk profile with multiple safety concerns. When combined with the often sporadic and inconsistent use of these products, the likelihood of related errors increases exponentially. Traditionally, these medications have been kept off institutional formularies. However, the risks associated with these products in both the safety and regulatory senses imply that they are precisely the medications that should be added to the formulary. The utilization of ancillary drug information, medication policies, therapeutic guidelines, and clinical decision support tools is of particular importance for highly specialized medications. REMS restrictions, procurement considerations, and reimbursement constraints can be detailed in a manner that is available for reference. Additionally, the inclusion of these medications into the electronic medical record (EMR) system is imperative for improved medication safety practices. Combination sacubitril– valsartan is an oral medication indicated for treatment of heart failure.22 While not as high in cost as the previously discussed medications, it is considerably higher in cost than the alternative generic angiotensin-converting enzyme (ACE) inhibitors or angiotensin II receptor blockers (ARBs). Sacubitril–valsartan is contraindicated in patients with a history of ACE inhibitor– or ARB-induced angioedema and should not be administered within 36 hours of an ACE inhibitor or ARB because of an increased risk of these reactions. While EMR systems vary in capability and implementation, many health systems allow free-text EMR order entry for nonformulary medications. These free-text entries typically do not allow for automatic drug–drug, drug–allergy, drug–pregnancy, and custom alerts. While many health systems may opt to not regularly stock some higher-priced medications, as with sacubitril–valsartan, or may be unable to stock them, as with vigabatrin, this does not preclude the use of such medications in a patient during a hospital admission. In such cases, the loss of clinical decision support tools represents serious barriers to the safe use of medications. Assessment of options. As a result of a changing environment, the connection between a formulary medication and a routinely used product has weakened considerably. The very reasons that medications previously may have been excluded from formulary addition now make them especially important candidates for formulary consideration and implementation of ancillary formulary functions to support appropriate use. There are a variety of ways to handle this changing concept, and each will require flexibility of the institutional formulary system to accommodate the fluidity of the drug approval and regulatory landscape. To reflect current challenges, various formulary categories should be considered, including but not limited to the following Formulary, stocked Formulary, not stocked (or not consistently stocked) Formulary, restricted Formulary, requirement for confirmation of benefits or coverage prior to use Formulary, outpatient (or clinic) use only Nonformulary, stocked Nonformulary, not stocked The “nonformulary” designations are not intended as mere placeholders. Rather, it may be prudent to use formulary guidance as an opportunity to provide an explanation for a nonformulary designation in certain situations. In general, more substantial information related to formulary management is becoming increasingly important to decision-making at the point of care, particularly in an environment in which the factors for consideration may not be immediately clear. If a medication is not stocked, used, or recommended by the institution or is restricted to certain indications or encounter types, compliance with these policies may be enhanced through provision of an additional level of information. As opposed to the short statements typical of current restriction policies, this supplemental information should address the “why” of the decision as well as guidance and/or algorithms for the selection of alternatives. Recommendations. The traditional notion of a formulary medication as one that is regularly used and stocked has become antiquated. Infrequent use of a medication for a niche population should no longer be the sole grounds for designation of the drug as a nonformulary product. In fact, such medications are often of high cost, restricted in availability, or intended for highly specialized use in patient care. The ancillary drug information, medication policies, therapeutic guidelines, and clinical decision support tools tied to formulary medications are essential to managing appropriate, cost-effective, and safe use of these types of medications. The purposes and functions of the pharmacy and therapeutics (P&T) committee are policy development, communication, education, and formulary management.1 Therefore, the P&T committee will naturally remain key in the implementation and monitoring of any changes to formulary management strategies. Specific aspects of P&T committees, however, may warrant reevaluation within individual health systems. Large health systems may collapse or consolidate local P&T committees to support a systemwide approach encompassing all hospitals, clinics, and community pharmacies. Membership may need to be expanded to provide appropriate clinical expertise for highly specialized medications as well as practice perspectives for all care settings (e.g., clinic versus inpatient) and hospital functions (e.g., community versus academic). Additional subcommittees or ad hoc work groups may also be required to ensure that the appropriate stakeholders and experts have adequate opportunity to discuss details and logistics prior to approval by a systemwide committee. Regardless of the specific strategy taken, strong medication-use policies will be important to the successful management of high-cost and highly specialized medications, including those classified as nonformulary products. Robust policies and procedures defining the use and approval of medications with restricted availability or very high costs are warranted. These policies may institute a second-level review or approval for high-cost, highly specialized, or nonformulary medications to support formulary and policy adherence. A continual monitoring process should be used to ensure that regulatory and institutional policies, restrictions, and requirements are appropriately enforced and documented. Medication safety considerations and risk mitigation strategies should be evaluated for all medications that may be used in the hospital regardless of frequency of use or intended stocking practices. And finally, EMR functionality as it relates to nonformulary medications must be closely scrutinized. Pathways that limit clinical decision support, such as allergy and drug– drug interaction checking, are highly discouraged. Additional drug evaluation criteria should be incorporated into an updated ASHP guideline on the formulary system. These additional criteria should include, at a minimum, procurement and access restrictions, reimbursement considerations, regulatory requirements, and assessment of clinical decision support functionality. This guideline may also be expanded to include a discussion of the appropriate selection and implementation of each of the additional formulary and nonformulary categories described above. Conclusion. The state of healthcare in the United States continues to rapidly change. Historical formulary management styles and practices may no longer be adequate for managing the high-cost and highly specialized medications currently available. Ignoring this paradigm shift will lead to inappropriate and costly nonformulary medication use. These changes necessitate the implementation of flexible and creative formulary management strategies by health systems and hospital pharmacies. Disclosures The authors have declared no potential conflicts of interest. References 1 Tyler LS Cole SW May JR et al, for the ASHP Expert Panel on Formulary Management . ASHP guidelines on the pharmacy and therapeutics committee and the formulary system . Am J Health-Syst Pharm . 2008 ; 65 : 1272 – 83 . Google Scholar Crossref Search ADS PubMed 2 Rubino M Hoffman JM Koester LJ Swendrzynski RG , for the ASHP Expert Panel on Medication Cost Management . ASHP guidelines on medication cost management strategies for hospitals and health systems . Am J Health-Syst Pharm . 2008 ; 65 : 1368 – 84 . Google Scholar Crossref Search ADS PubMed 3 IMS Institute for Healthcare Informatics . Healthcare spending among privately insured individuals under age 65 ( February 2012 ). www.imshealth.com/files/web/IMSH%20Institute/Reports/Healthcare%20Spending%20Among%20Age%2065/IHII_Spending_Report.pdf (accessed 2017 May 29). 4 Schmidt R Suzuki S Neuman K . Medicare drug spending ( September 2015 ). www.medpac.gov/docs/default-source/meeting-materials/september-2015-meeting-presentation-medicare-drug-spending.pdf?sfvrsn=0 (accessed 2017 May 29). 5 America’s Health Insurance Plans . Specialty drugs: issues and challenges ( July 2015 ). www.ahip.org/wp-content/uploads/2015/07/IssueBrief_SpecialtyDrugs_7.9.15.pdf (accessed 2017 May 29). 6 Express Scripts . 2015 drug trend report ( March 2016 ). https://lab.express-scripts.com/lab/~/media/e2c9d19240e94fcf893b706e13068750.ashx (accessed 2017 May 29). 7 Rare diseases: a report on orphan drugs in the pipeline . In: Medicine in development , 2013 . Washington, DC : Pharmaceutical Research and Manufacturers of America ; 2013 : 1 – 56 . 8 Humer C . Exclusive: makers took big price increases on widely used U.S. drugs ( April 2016 ). www.reuters.com/article/us-usa-healthcare-drugpricing-idUSKCN0X10TH (accessed 2017 May 29). 9 Exondys 51 (eteplirsen) injection prescribing information . Cambridge, MA : Sarepta Therapeutics ; 2016 Sep . 10 Red Book Online [online database] . Greenwood Village, CO : Truven Health Analytics (accessed 2017 May 29). 11 Spinraza (nusinersen) prescribing information . Cambridge, MA : Biogen ; 2016 Dec . 12 Heindel G Smith J Cruz J Pappas A . Utilizing a drug information center for submitting reconsiderations for local coverage determinations . Am J Health-Syst Pharm . 2017 ; 74 : 106 – 7 . Google Scholar Crossref Search ADS PubMed 13 Defitelio (defibrotide sodium) prescribing information . Palo Alto, CA : Jazz Pharmaceuticals ; 2016 Mar . 14 Omidria (phenylephrine and ketorolac) prescribing information . Seattle, WA : Omeros ; 2016 May . 15 Fox ER Sweet BV Jensen V . Drug shortages: a complex healthcare crisis . Mayo Clin Proc . 2014 ; 89 : 361 – 73 . Google Scholar Crossref Search ADS PubMed 16 Fox ER Birt A James KB et al, for the ASHP Expert Panel on Drug Product Shortages . ASHP guidelines on managing drug product shortages in hospitals and health systems . Am J Health-Syst Pharm . 2009 ; 66 : 1399 – 406 . Google Scholar Crossref Search ADS PubMed 17 American Society of Health-System Pharmacists . 2014 drug shortages summit ( August 2014 ). www.ashp.org/-/media/assets/drug-information/docs/drug-resources-2014-drug-shortages-summit.ashx?la=en&hash=6633BADAA-CA4B34BDE5D2B0CC2E7C5846EA3E118 (accessed 2017 Aug 12). 18 American Society of Health-System Pharmacists . 2013 drug shortages summit: evaluating long-term solutions ( April 2013 ). www.ashp.org/-/media/assets/drug-information/docs/drug-resources-2013-drug-shortages-summit.ashx?la=en&ash=39BA3EE11FA626D254F3F537525B8E-82DAF1E1B5 (accessed 2017 Aug 12). 19 Sabril (vigabatrin) prescribing information . Deerfield, IL : Lundbeck ; 2016 Jun . 20 Zinbryta (daclizumab) prescribing information . North Chicago, IL : AbbVie ; 2016 May . 21 Carbaglu (carglumic acid) prescribing information . Lebanon, NJ : Recorbati Rare Diseases ; 2015 Nov . 22 Entresto (sacubitril and valsartan) prescribing information . East Hanover, NJ : Novartis Pharmaceuticals ; 2015 Aug . Copyright © 2018 by the American Society of Health-System Pharmacists, Inc. All rights reserved. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Health-System Pharmacy Oxford University Press

Contemporary challenges and novel strategies for health-system formulary management

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Abstract

drug information, formularies, hospital, pharmacy and therapeutics committee The 2008 ASHP “Guidelines on the Pharmacy and Therapeutics Committee and the Formulary System” noted that designation of a formulary medication should reflect a determination that the medication is “appropriate for routine use” (emphasis added) in a particular patient population.1 Many health systems and hospitals have adopted a slightly altered definition of a formulary medication (i.e., a product readily available or stocked within the pharmacy). Indeed, this altered definition seems to have been adopted in other ASHP guidelines.2 In the decade since the publication of the ASHP guidelines on formulary system management,1 the environment surrounding hospital pharmacies has changed dramatically. The cost of pharmaceuticals, the types of newly approved medications, and the stipulations related to the reimbursement or procurement of medications have all been significantly altered. Outpatient clinic services, often supplied by hospital pharmacies and their associated formulary systems, have also been affected by these changes, albeit often in a slightly different manner than in the inpatient setting. This altered climate presents a growing number of reasons that the concept of a formulary medication should be uncoupled from that of a regularly stocked or routinely used product. Current challenges. The traditional definition of a drug formulary continues to describe an appropriately inclusive system. However, the existing standards for evaluation of a drug for formulary addition no longer accurately reflect the factors that must be considered. Procurement and regulatory restrictions are of growing concern, and economic considerations have expanded significantly. In addition, the safety and regulatory risks associated with many of these medications emphasize the need to use additional formulary strategies that facilitate medication use and improve patient safety for all medications regardless of frequency of use. Pricing. Prescription drug expenditures are now responsible for as much as 20% of total healthcare spending in the United States.3–6 These price increases are largely driven by specialty drugs, which are expected to account for 44% of all drug spending in 2017. Similarly, orphan drug spending is projected to more than double by 2022 to represent more than 20% of all prescription drug sales.7 In addition to the growing number of specialized and high-priced therapy options on the market, 4 of the top 10 prescription drugs have increased in price by more than 100% since 2011. Each of these changes to the medication landscape contributes to a tangible financial impact on hospital pharmacies and healthcare systems.8 These increasing costs are clearly prohibitive for hospital pharmacies attempting to employ the traditional approach of routinely stocking all formulary medications within the institution. For cases in which high acquisition cost is the sole prohibitive factor, a handful of creative solutions to circumvent the concept of routine stocking can be considered. Products that are not required emergently or are not needed during inpatient stays may not need to be regularly stocked and can be ordered individually for each scheduled patient or dose. Thus, advance scheduling and restrictions on setting of care (e.g., inpatient versus outpatient) during use can be implemented. A recent example of such a product is eteplirsen, an i.v. medication used for the treatment of Duchenne muscular dystrophy.9 The mechanism of action of eteplirsen limits its efficacy to a small number of patients with specific gene mutations, which discourages regular stocking of the drug due to its rare indication for use. However, with an average wholesale price (AWP) of $8,000 per 500-mg vial,10 the provision of clear guidance on appropriate situations for procurement and administration will be critical to cost containment. For those higher-priced products that are needed for emergent uses, such as antidotes and blood factor products, alternative stocking systems, including consignment contracts and regional sharing between institutions, can be considered. The expense of a lost, damaged, or expired vial of a high-cost medication can now exceed the expense of a pharmacist full-time equivalent per year. Indisputably, regularly stocking such high-cost and infrequently used medications is not advisable. Thus, ancillary formulary management functions, such as issuance of guidelines and criteria for use, may prove vital to cost containment for such products, particularly those not intended to be stocked consistently. Reimbursement. In addition to the clear limitations associated with high acquisition costs, some medications are now subject to strict reimbursement practices of insurance companies; these could include limiting reimbursement to outpatient use only, with no allotted reimbursement if a drug is administered during an inpatient admission. A timely example is nusinersen, an intrathecal injection used to treat spinal muscular atrophy.11 The AWP of nusinersen is $150,000 per dose,10 which may not be reimbursed when the drug is administered to hospitalized patients. The costs and benefits of administration of such high-cost medications in care settings in which optimal reimbursement is not assured must be closely evaluated and monitored. National and local coverage determinations are increasingly including high-cost medications.12 These documents, available from the Centers for Medicare and Medicaid Services, will need to be evaluated for relevant medications when determining formulary status or criteria for use. Some high-cost medications are eligible for additional inpatient reimbursement (i.e., payment beyond what is obtained from a diagnosis-related group payment) to compensate for the increased cost of treatment. The new technology add-on payment for defibrotide, for example, helps alleviate the high cost of inpatient administration, but the expense must be appropriately coded and billed at the time of use.13 These payment mechanisms can represent significant revenue but are likely to go unused due to their unusual and insurer-specific nature. Health systems with a mix of 340B Drug Pricing Program–eligible and 340B-noneligible facilities may also identify a drastic difference in costs between facilities. This disparity may create a compelling reason to restrict the use of high-cost medications to those hospitals or clinics that are designated 340B-eligible facilities. The logistic and ethical aspects of this practice must be heavily considered, as the cost avoidance can be very great (e.g., more than $25,000 per dose of nusinersen). Lastly, as many health systems have become the consolidated source of all aspects of medical care, including the insurance provider, relative costs must be weighed across the board. For example, the use of phenylephrine–ketorolac injection, which is administered during cataract surgeries, may increase revenue for a clinic in comparison to the use of generic epinephrine.14 This increased revenue, however, comes at the expense of the insurance provider. In a health system that is both the clinic provider and the insurer, the higher revenue for the clinic does not represent increased value for the health system. This scenario may instead increase the overall cost to the health system if use of the alternative medication also entails a high acquisition cost for the clinic. As the focus on larger health-system costs has expanded, these considerations have become important during formulary evaluations. Availability. Price is not the only, or even the primary, point of concern related to the increasing number of specialty and orphan products on the market. There are a number of new restrictions in relation to the ways that medications can be prescribed, obtained, and dispensed. These manufacturer-, insurer-, and/or government-enforced restrictions have permanently altered the traditional concept of medication stock. Drug shortages have also presented significant challenges within formulary systems.15 In-depth analyses of the causative factors and management strategies for such shortages have been addressed previously15–18 and are therefore excluded from this discussion. A number of medications on the market are now restricted to acquisition via “patient supply.” In some cases, these restrictions are entirely insurance based. Such restrictions most commonly occur in the setting of outpatient infusions. For instance, in place of the hospital pharmacy purchasing and billing for the medication in question, insurance companies may mandate the use of medications shipped from a contracted mail-order pharmacy, a practice commonly referred to as white-bagging. Risk evaluation and mitigation strategy (REMS) restrictions, enforced by the Food and Drug Administration, can also limit the way that medications are prescribed, purchased, and supplied. In the case of vigabatrin, an oral medication used for specific forms of epilepsy, all doses past the 5-day initiation period must be shipped directly to the patient.19 This obstacle necessitates the use of the patient’s own medication during hospital admissions. In other situations, such as with daclizumab (a drug indicated for the treatment of relapsing multiple sclerosis), REMS requirements limit availability to pharmacies that have been specially certified to dispense the medication.20 Pharmacy certification of this type can range from straightforward and easy to complex and implausible for most health-system pharmacies. Finally, several medications for rare diseases may only be purchased by a hospital pharmacy from a specialty pharmacy pursuant to a specific patient requirement. Thus, the medication cannot be routinely stocked and must be ordered once a patient has already been admitted or is scheduled for admission. Carglumic acid, an oral product indicated to treat N-acetylglutamate synthase deficiency, is an example of a drug subject to this form of procurement restriction.21 The procurement and availability concerns in each of these cases imply operational quandaries that are not encountered with medications that are ordered and stocked by the institution. Straightforward tasks such as ensuring the adequate and timely supply of products become confusing, difficult, and time-consuming. In addition, guidance to ensure appropriate preparation and administration or compliance with third-party restrictions and requirements may not be readily available for nonformulary items. Such guidance is often provided as ancillary formulary information, presenting an argument for addition of such items to the formulary regardless of ability to procure and stock a medication. Specialization and inconsistent use. The concerns associated with high-cost and highly restricted products extend beyond the operational considerations of procurement and stocking. The specialization of these products often implies a large amount of regulation, as well as a high-risk profile with multiple safety concerns. When combined with the often sporadic and inconsistent use of these products, the likelihood of related errors increases exponentially. Traditionally, these medications have been kept off institutional formularies. However, the risks associated with these products in both the safety and regulatory senses imply that they are precisely the medications that should be added to the formulary. The utilization of ancillary drug information, medication policies, therapeutic guidelines, and clinical decision support tools is of particular importance for highly specialized medications. REMS restrictions, procurement considerations, and reimbursement constraints can be detailed in a manner that is available for reference. Additionally, the inclusion of these medications into the electronic medical record (EMR) system is imperative for improved medication safety practices. Combination sacubitril– valsartan is an oral medication indicated for treatment of heart failure.22 While not as high in cost as the previously discussed medications, it is considerably higher in cost than the alternative generic angiotensin-converting enzyme (ACE) inhibitors or angiotensin II receptor blockers (ARBs). Sacubitril–valsartan is contraindicated in patients with a history of ACE inhibitor– or ARB-induced angioedema and should not be administered within 36 hours of an ACE inhibitor or ARB because of an increased risk of these reactions. While EMR systems vary in capability and implementation, many health systems allow free-text EMR order entry for nonformulary medications. These free-text entries typically do not allow for automatic drug–drug, drug–allergy, drug–pregnancy, and custom alerts. While many health systems may opt to not regularly stock some higher-priced medications, as with sacubitril–valsartan, or may be unable to stock them, as with vigabatrin, this does not preclude the use of such medications in a patient during a hospital admission. In such cases, the loss of clinical decision support tools represents serious barriers to the safe use of medications. Assessment of options. As a result of a changing environment, the connection between a formulary medication and a routinely used product has weakened considerably. The very reasons that medications previously may have been excluded from formulary addition now make them especially important candidates for formulary consideration and implementation of ancillary formulary functions to support appropriate use. There are a variety of ways to handle this changing concept, and each will require flexibility of the institutional formulary system to accommodate the fluidity of the drug approval and regulatory landscape. To reflect current challenges, various formulary categories should be considered, including but not limited to the following Formulary, stocked Formulary, not stocked (or not consistently stocked) Formulary, restricted Formulary, requirement for confirmation of benefits or coverage prior to use Formulary, outpatient (or clinic) use only Nonformulary, stocked Nonformulary, not stocked The “nonformulary” designations are not intended as mere placeholders. Rather, it may be prudent to use formulary guidance as an opportunity to provide an explanation for a nonformulary designation in certain situations. In general, more substantial information related to formulary management is becoming increasingly important to decision-making at the point of care, particularly in an environment in which the factors for consideration may not be immediately clear. If a medication is not stocked, used, or recommended by the institution or is restricted to certain indications or encounter types, compliance with these policies may be enhanced through provision of an additional level of information. As opposed to the short statements typical of current restriction policies, this supplemental information should address the “why” of the decision as well as guidance and/or algorithms for the selection of alternatives. Recommendations. The traditional notion of a formulary medication as one that is regularly used and stocked has become antiquated. Infrequent use of a medication for a niche population should no longer be the sole grounds for designation of the drug as a nonformulary product. In fact, such medications are often of high cost, restricted in availability, or intended for highly specialized use in patient care. The ancillary drug information, medication policies, therapeutic guidelines, and clinical decision support tools tied to formulary medications are essential to managing appropriate, cost-effective, and safe use of these types of medications. The purposes and functions of the pharmacy and therapeutics (P&T) committee are policy development, communication, education, and formulary management.1 Therefore, the P&T committee will naturally remain key in the implementation and monitoring of any changes to formulary management strategies. Specific aspects of P&T committees, however, may warrant reevaluation within individual health systems. Large health systems may collapse or consolidate local P&T committees to support a systemwide approach encompassing all hospitals, clinics, and community pharmacies. Membership may need to be expanded to provide appropriate clinical expertise for highly specialized medications as well as practice perspectives for all care settings (e.g., clinic versus inpatient) and hospital functions (e.g., community versus academic). Additional subcommittees or ad hoc work groups may also be required to ensure that the appropriate stakeholders and experts have adequate opportunity to discuss details and logistics prior to approval by a systemwide committee. Regardless of the specific strategy taken, strong medication-use policies will be important to the successful management of high-cost and highly specialized medications, including those classified as nonformulary products. Robust policies and procedures defining the use and approval of medications with restricted availability or very high costs are warranted. These policies may institute a second-level review or approval for high-cost, highly specialized, or nonformulary medications to support formulary and policy adherence. A continual monitoring process should be used to ensure that regulatory and institutional policies, restrictions, and requirements are appropriately enforced and documented. Medication safety considerations and risk mitigation strategies should be evaluated for all medications that may be used in the hospital regardless of frequency of use or intended stocking practices. And finally, EMR functionality as it relates to nonformulary medications must be closely scrutinized. Pathways that limit clinical decision support, such as allergy and drug– drug interaction checking, are highly discouraged. Additional drug evaluation criteria should be incorporated into an updated ASHP guideline on the formulary system. These additional criteria should include, at a minimum, procurement and access restrictions, reimbursement considerations, regulatory requirements, and assessment of clinical decision support functionality. This guideline may also be expanded to include a discussion of the appropriate selection and implementation of each of the additional formulary and nonformulary categories described above. Conclusion. The state of healthcare in the United States continues to rapidly change. Historical formulary management styles and practices may no longer be adequate for managing the high-cost and highly specialized medications currently available. Ignoring this paradigm shift will lead to inappropriate and costly nonformulary medication use. These changes necessitate the implementation of flexible and creative formulary management strategies by health systems and hospital pharmacies. Disclosures The authors have declared no potential conflicts of interest. 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Journal

American Journal of Health-System PharmacyOxford University Press

Published: Apr 15, 2018

References

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