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DOD attacks rising pharmacy costs

FALLS CHURCH, Va. (AFPN) -- In the first year since the Department of Defense began using the uniform formulary process to review and classify prescription drugs, $500 million has been saved.

In addition, the Pharmacy Data Transaction Service, or PDTS, has avoided more than 171,000 potentially life-threatening drug interactions since 2001, said Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs.

“More than 2.1 million prescriptions are filled in the military health system during a typical week,” Dr. Winkenwerder said. “Since we began using the pharmacy uniform formulary last year, we have been able to move forward rapidly to make prudent decisions that protect our beneficiaries’ health and at the same time save costs.”

The uniform formulary established a process that places prescription drugs into one of three cost-share tiers, based upon their relative clinical and cost effectiveness.

“These pharmacy decisions reflect our strong interest in seeing that our beneficiaries get the medications they need,” Dr. Winkenwerder said. “It is our goal to ensure that the best balance of efficacy and cost effectiveness is accomplished.”

The DOD Pharmacy and Therapeutics Committee meets quarterly to recommend medications for placement on the uniform formulary or to be non-formulary. The group is made up of physicians and pharmacists, representatives from the military services, the Department of Veterans Affairs and the Coast Guard. Their recommendations are vetted with a Beneficiary Advisory Panel, whose membership includes representatives of active duty families and retirees, civilian health care professionals and TRICARE contractors.

The uniform formulary is just one of several measures that DOD has implemented over the past five years to enhance quality and reduce costs, said Capt. Tom McGinnis, TRICARE chief pharmaceutical officer.

“Savings have also come from DOD and VA pursuing joint contracts for our pharmacy programs. In fiscal 2007, it is estimated that we will save nearly $200 million alone by using joint national contracts,” he said.

Beneficiaries are also being encouraged to use the TRICARE mail order pharmacy program for maintenance medications to save money and for convenience.

“Mail order is a win-win because it reduces the department’s costs dramatically, while offering maintenance medications to our beneficiaries for reductions from what they are paying to the retailers,” Dr. Winkenwerder said.

“The program is perfectly safe and convenient and the prescriptions are delivered directly to your home,” Captain McGinnis said. The department is launching a marketing campaign to encourage more TRICARE beneficiaries to use mail order.

“Beneficiaries can access a registered pharmacist at any time via a toll-free number to answer any questions they have about their prescriptions,” he said.

Since 2001, DOD's software program for physicians and pharmacists called PDTS has improved the quality of DOD prescription services and enhanced patient safety by reducing the likelihood of adverse drug interactions and duplicate treatments.

With each new or refill prescription, a screen automatically checks the prescription against the beneficiary’s complete medication history before it is dispensed. This transparent online activity occurs in the background for health care providers.

“PDTS has resulted in much higher quality medical care, not only for DOD beneficiaries, but for many other Americans as well,” Captain McGinnis said. “PDTS is the first data system to centralize such information and make it available through the entire community of TRICARE providers.”

This initiative prompted civilian medical facilities and pharmacies nationwide to use adverse event screening software.

“For the military health system, it has reduced fraud and abuse, created better management reporting, saved money through the avoidance of adverse events because they cost money to treat -- and most important, PDTS has increased patient safety,” Captain McGinnis said.

DOD is planning to implement other initiatives to manage costs of the pharmacy benefit so that it can be sustained. In February, the department rolled out some modest pharmacy cost-share increases.

“There will be no fee changes whatsoever for the active duty service member,” Dr. Winkenwerder said. “For all other beneficiaries, including those aged 65 and over, there will be no pharmaceutical co-pays in military clinics and zero co-pays for mail order generic medications. However, there will be increases in retail pharmacy co-pays and higher co-pays for a few non-covered medications.”

For more information on the Uniform Formulary, visit TRICARE’s Web site at www.tricare.osd.mil/pharmacy/unif_form.cfm.

(Courtesy of TRICARE News Service)