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Weaknesses Cited in VA National Formulary

Nancy Tarleton Landis

Better formulary oversight is needed to ensure a standard outpatient pharmacy benefit for the Department of Veterans Affairs (VA) health system, according to a new General Accounting Office (GAO) report. Although most prescriptions written are for drugs on the VA national formulary, and veterans are usually able to get the drugs they need, VA medical centers and regional authorities need to improve their compliance with formulary processes, said the report (PDF).

Following up on earlier reports to Congress on the VA formulary (see February 1 and July 15, 2000, AJHP News summaries), GAO studied implementation by medical centers and VA’s 22 regional Veterans Integrated Service Networks (VISNs), the processes used for obtaining nonformulary drugs, and whether health care providers are able to prescribe the drugs that patients need. Formulary policies and nationwide VA prescription data were reviewed. In addition, GAO investigators visited medical centers in Gainesville, Florida; Biloxi, Mississippi; and Omaha, Nebraska; and 2000 VA prescribers were surveyed about the effects of national formulary implementation.

All drugs on the national formulary, which was implemented in 1997, are to be available to prescribers at all VA medical centers. The VISNs may have additional drugs on their formularies to meet local patient needs. The national formulary has more than 1100 unique drugs assigned to 254 classes. Four classes are closed, meaning the VA has committed-use contracts for agents in the class. In fiscal year 2000, VA’s pharmacy benefit cost $2 billion—about 12% of VA’s total health care budget, compared with 6% 10 years ago.

GAO found that, of all VA outpatient prescriptions written from October 1999 through March 2000, 90% were for drugs on the national formulary. But at two of the three medical centers visited, many of the required national formulary agents (286 at one facility and 147 at the other) were not available to prescribers. The effect, said GAO, was that in the six-month study period health care providers at the two facilities had to obtain "nonformulary drug approvals" for 22,000 prescriptions of national formulary agents. (At the first medical center, no prescriptions were filled for 195 of the 286 missing national formulary agents; at the second, none were filled for 124 of the 147 missing agents.)

All three of the medical centers visited had "inappropriately modified" the national formulary list of drugs in the closed classes. One medical center did not make an agent in a closed class available, and two centers added drugs in closed classes.

GAO found that standardization of the VA drug benefit is also being jeopardized by the extent to which VISNs add drugs to supplement the national formulary. From June 1997 through March 2000, VISNs added 244 unique drugs (ranging from 5 to 63 per VISN). According to the report, VA’s Pharmacy Benefits Management Strategic Healthcare Group plans to address this variation by reviewing new drugs approved by FDA to determine whether they will be added to the national formulary (which can happen only after a drug has been marketed for one year) or if VISNs may continue to add these drugs to supplement the national formulary.

Existing VA data can identify a prescription only as either a national formulary agent or not. Of the 10% of prescriptions outside the national formulary, 70% are estimated to be for drugs added by VISNs and medical centers and 30% for nonformulary drugs.

The national formulary does not dictate a specific nonformulary request process. GAO found that medical centers’ processes for approval of nonformulary drugs were "not always timely" and that the time needed for such approvals varied widely. Sixty percent of the prescribers surveyed said it took an average of nine days to gain approval to use a nonformulary drug, but many prescribers reported times of a few hours or minutes. Further, 12 of the 22 VISNs had not established processes for analyzing nonformulary requests to determine whether decisions to approve or deny such requests are appropriate.

GAO recommended the following actions by top VA officials to correct the "weaknesses" identified:

  • Establish a mechanism for ensuring that VISN directors comply with national formulary policy,
  • Establish criteria that VISNs should use to determine the appropriateness of adding drugs to supplement the national formulary,
  • Establish a nonformulary drug approval process for medical centers that ensures appropriate and timely decisions and provides that veterans for whom a nonformulary drug has been approved have continued access to that drug throughout the VA system, and
  • Enforce requirements for collecting and analyzing data on requests for nonformulary drugs.