Best Practices

Controlling the Cost of Oncology Drugs Within the VA: A National Perspective

The VA Pharmacy Benefits Management Service has developed a number of tools and procedures to provide treatment guidance, increase consistency, and minimize costs across all VA facilities.

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The VA National Formulary has existed since 1995. Before the development of a single national formulary, each VA facility managed its pharmacy benefit plan through its pharmacy and therapeutics committees. In other words, 173 formulary processes correlating with 173 facilities managed the pharmacy benefit across the entire VA system. This system served > 4 million veterans, providing > 108 million prescriptions per year.

Variations in provision of the pharmacy benefit were commonplace, including veteran access to drug therapy. Formulary processes for a particular drug that were already established in one facility might not have been developed in another facility. This variation among locations oftentimes limited drug availability. The purpose of developing a single National Formulary was twofold: (1) provide a uniform pharmacy benefit to all veterans by reducing variation in access to drugs among the facilities; and (2) obtain leverage in contract pricing for drugs across the entire VA system.

Pharmacy Benefits Management Capabilities

In 1995, VA Under Secretary for Health Kenneth Kizer,MD, established the VA Pharmacy Benefits Management (PBM) Services division. Pharmacy Benefits Management was assigned the tasks of developing a national formulary, creating pharmacologic guidelines, and managing drug costs and utilization. The VA Drug Product and Pharmaceuticals Management Division, based in Hines, Illinois, which already managed and monitored drug usage and purchasing for each VA Medical Center (VAMC) facility, expanded its services by hiring clinical pharmacists. These clinical pharmacists collaborated with field-based physicians to form the VA Medical Advisory Panel (MAP).

The VA Healthcare System is currently divided into 21 geographically defined VISN (Veteran Integrated System Network) regions. Each VISN has a designated VISN Pharmacist Executive (VPE), formerly known as a VISN Formulary Leader. The VPE serves as a pharmacy liaison between the VA health care facilities within the VISN and the national PBM. This collaboration allows open communication and a sharing of ideas and issues regarding drug therapy within the VA system. Collectively, this physician-pharmacist-based group became known as the Veterans Affairs Pharmacy Benefits Management Services division.

The National Acquisition Center (NAC) is another important collaborator with the PBM. Opportunities for pharmaceutical contracting are sought through the NAC. This contracting mechanism offers the VA opportunities for price reductions on bulk purchases, ready access to needed drugs, and a streamlined drug inventory process that reduces inventory management costs. In addition, with pharmaceutical contracting, the VA can provide identical drugs via multiple sources to minimize confusion for the patient. The NAC obtains optimized pricing through various techniques, such as competitive bidding among branded products within drug classes, the Federal Supply Schedule (FSS) program, and performance-based incentive agreements. These techniques allow the VA to maintain stability with regard to average acquisition costs per 30-day-equivalent prescriptions. 1,2

National PBM Clinical Program

The primary function of the National PBM Clinical Pharmacy Program Managers (NPBM-CPPMs) is to maintain the National Formulary. In addition, PBM functions to support VA field practitioners with promoting the safe and effective use of all medications, with the ultimate goal of helping veterans achieve optimal therapeutic outcomes.

The Clinical Program includes 12 NPBM-CPPMs. This group is composed of clinical pharmacists with advanced training and education in specialty therapeutic areas who serve as pharmaceutical subject matter experts within their specialty. It is the responsibility of this group to author drug monographs that summarize clinical data about the safety and efficacy of newly approved drugs (new molecular entities). These drug monographs serve as a tool to assist in determining the formulary status of a drug. The documents are evidence based and extensive, providing the necessary information for considerations related to formulary status.


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