A new format for making more cost-effective drug coverage decisions takes
Health plans demand more information to gauge real value of
By John Otrompke, JD
Employers may benefit from more cost-effective drug coverage decisions by their
health plans as a result of growing acceptance of the Academy for Managed Care
Pharmacy Format for Formulary Submissions (AMCP Format). Since it was issued
about a year ago, the Format has been quickly adopted by pharmacy benefit managers
and health plans, who use it to better assess the costs and benefits of adding
new drugs to formularieslists of prescription drugs covered under a pharmacy
The AMCP Format asks drug manufacturers to submit a comprehensive dossier of
information on each new drug submission a manufacturer makes to a health plan's
formulary. Analysts say compiling the dossier can require an expensive amount
of work, but some health plans are playing hardball in demanding it from drug
The Format began to emerge when a number of payers on the West coast, such as
Regence Blue Shield and Group Health Cooperative of Puget Sound, began using
evidence-based medicine to determine how manufacturers' claims of new value
for increased drug prices really stacked up. The Regence method of requesting
a complete dossier of specific drug information became the basis for the AMCP
Pete Fullerton, associate vice president for pharmacy at Regence, said the dossier
asks for information considerably beyond what would be included in an FDA study.
"The FDA only requires evidence of efficacy, which means placebo-controlled
trials," he explained. "It's nice that such and such a drug increases lung
volume, but what we really want to know is about
outcomes. For a new asthma drug, is there any change in how often patients had
to go to the ER, any change in the quality of life and any reduction in overall
One measure of drug effects addressed by AMCP's format is patient satisfaction,
according to Marc Mora, MD, chairman of the P&T Committee at Group Health.
"We like them to measure patient quality-of-life before and after therapy,"
he said. "For example, when manufacturers report results of an asthma medication,
they may report very small changes in breathing tests. We want to know whether
patients can walk farther, use their medicine less and sleep better at night."
Benefits managers such as PBM National Prescription Administrators use the
Format in conjunction with disease management programs to better help beneficiaries
and save system costs.
"We haven't actually adopted the Format in whole, but we've
been asking for some of the components of it," said Bob Voytovich, senior
vice president for professional services. Voytovich said NPA has been receiving
cooperation in 30 to 40 percent of the formulary submissions it receives.
"We like to ask them, How do you feel your product is going to fit
in? Is it going to replace an existing therapy?'" Voytovich continued.
For example, submissions in regards to new angiotensin reception blockers (ARBs)
have been helpful. ARBs are more expensive than the old ACE inhibitors, but
are beneficial to some patients who develop a slight cough on the latter drug,
Another example is Thalmid, generically called thalidomide. Once notorious
for causing birth defects, thalidomide is now available for the treatment of
leprosy. "When we reviewed Thalmid for formulary inclusion, we asked, Will
this drug have a big budgetary impact as a treatment for leprosy?'"
Fortunately for the manufacturer, the formulary submission also bore out the
fact that thalidomide is useful for treatment of multiple myeloma.
The Format asks manufacturers to use a validated set of established questions,
known as the SF 36, to measure quality of life, according to Tom Johnson, director
of clinical pharmacy at WELLPOINT Health Networks. He said WELLPOINT has actually
received no complete dossiers from drug manufacturers, but added, "That's not
surprising, because the dossier is a phenomenally long and complex process in
terms of the information requested." Nonetheless, Johnson said, all the manufacturers
his organization has dealt with have expressed a willingness to begin to comply.
Other plans have had more success at wresting completed dossiers from drug
companies. "Since we instituted our plan two-and-a-half years ago, we've never
reviewed a drug without a dossier, with one exception," said Regence's Fullerton.
Regence has since reviewed 54 dossiers, accepting 49 percent of the submissions
for the formulary, he said.
"Our one exception was for the drug Enbrel, for rheumatoid arthritis," Fullerton
said. "We couldn't get the information out of the drug company, so we went to
Stanford University, which did the outcomes analysis. They concluded that it
wasn't worth the money, except for people who've tried and failed on other drugs."
Regence placed the drug on the formulary, but required prior authorization.
Other health plans have reported levels of success at getting manufacturers
to comply with the Format, varying between the experiences of Regence and WELLPOINT.
Group Health, for example, has received four complete dossiers on formulary
submissions, as well as six more that did not include dossiers but did include
information on some clinical trials not required by the FDA.
The dossier process allows manufacturers to submit clinical information about
off-label uses to health plans that they would otherwise be prohibited from
doing under FDA regulations, according to Group Health's Jennifer Hrachovec,
pharmacist staffer for the plan's P&T Committee.
According to Dell Mather, director of pharmacotherapy assessment and policy
at Prime Therapeutics, his PBM has received eight to ten complete dossiers in
accordance with the Format. "Only about half have included the economic data
that's been requested, but most are doing a very good job at providing us with
copies of articles and summarizing the data," Mather said.
Even the data submitted in a dossier is sometimes suspect. "We really feel very
strongly about randomized control trials in real patients," said Hrachovec.
"We received a dossier regarding a drug based on studies that were five months
in duration, but the dossier projected health results over ten years. We were
very hesitant to accept their conclusions regarding the effects of the drug
on patient quality of life," she said.
Such uncertainties arise because the Format process asks manufacturers to provide
economic modeling regarding how a drug will reduce health system costs overall
but doesn't specify a methodology for such modeling. "This can be a theoretical
exercise, where they project out the expected value of the medicine," said Hrachovec.
"But the link to value in a real population is sometimes a big leap."
In another example, a company submitted a somewhat quirky dossier on a new
drug for Alzheimer's. "The manufacturer claimed treating Alzheimer's would reduce
the number of caregiver hours required, and though the claims were fairly well-substantiated,
the studies were not published or peer-reviewed," Hrachovec recalled. But Group
Health added the drug.
Industry analysts say that manufacturers are coming forward with the requested
information, pressed partly by big health plans, and by the knowledge that they're
going to have little choice ultimately.
"They're very eager to provide whatever information they can to enable us to
understand their drug as well as possible," said Dell Mather. "Many have already
done economic modeling for submissions in other countries. Australia, Canada
and the UK require the submissions requested by the Format in all cases or in
At least half a dozen of the big manufacturers have even provided funding to
train pharmacists in how to use the Format, according to Steve Avey, executive
director of the Foundation for Managed Care Pharmacy, which is affiliated with
the AMCP. "We really want pharmacists to go through the training, because this
is a sophisticated process and they need to know how to assimilate all the information
they're getting," said Avey. The Foundation will average one training session
scheduled per month for the next year, with an average of 40 pharmacists trained
at each session.
According to Paul Tomondy, section head for medical communication and managed
care at Proctor and Gamble, some manufacturers may favor the Format's efficiency
even though compliance can be an expensive process. "Depending on the disease
state, developing the pharmacoeconomic data alone can cost from $100,000 to
$1 million," he said. In preparing for submission of an antiarrhythmic drug,
the company had to go back to Phase III clinical trials, with a $1 million dollar
price tag and a 2-year wait, said Tomondy. Another drug P&G has submitted,
Actonel, an osteoporosis treatment, has cost the company half a million in pharmacoeconomic
research. The company has submitted 32 dossiers, Tomondy said.
One of the data points industry sources hope the Format will bring out of manufacturers
is in the area of head-to-head clinical studies. The FDA requires only studies
of a drug's efficacy and safety, but health plans would be much better served
if drug companies were willing to ante up studies comparing one drug to another,
to see which is the most efficientinformation the Format asks companies to
submit, according to Pete Fullerton of Regence.
Fullerton said that fully one-third of the 54 studies received by Regence
over the past two-and-a-half years have included head-to-head studies. P&G's
Tomondy said that despite the current dearth of such studies in medical literature,
manufacturers might be inclined to submit them anyway if the product is considered
the "gold standard." "When we were studying the effect of Actenol on Paget's
disease, the gold standard was considered another drug called Didronel, he said,
"so we had to do a head-to-head study."
John Otrompke. A new format for making more cost-effective drug coverage decisions takes off. Business and Health 2002;2.