The Changing Future of Drug Formularies

December 1, 1997

Peter Penna, Pharm. D. spoke on the future of drug formularies and how he sees them changing. Formularies in managed care evolved out of formularies in hospitals and have been around since drugs became relatively commonly used in patient settings, Penna explained. "Today, formularies are widely used by hospitals, managed care organizations, pharmacy benefit management companies, home health agencies and nursing home services."

At the Drug Information Association annual meeting held in Montreal, Peter Penna, Pharm. D., vice president of managed pharmacy for Cigna Healthcare, spoke of the future of drug formularies, predicting that they would move "to a list of drugs that really are going to promote best outcomes." In an interview with Psychiatric Times, Penna elaborated on the future of drug formularies and how he sees them changing.Formularies in managed care evolved out of formularies in hospitals and have been around since drugs became relatively commonly used in patient settings, Penna explained. "Today, formularies are widely used by hospitals, managed care organizations, pharmacy benefit management companies, home health agencies and nursing home services."

Typical Drug Formularies

According to Penna, typically there are around 1,500 chemical entities on a drug formulary, but he believes managed care companies will begin to focus just on 50 or 100 items and ignore everything else.

"I said this at the meeting, and it was largely misconstrued," said Penna. "When we have to make a decision on how a drug should or should not be used we usually don't have the best information possible to make it." Penna noted that either the drug has not been in use long enough to get a true look at its side effects, or the drug companies have the information but they don't want to release it because it won't look particularly good. He cites the recent recall of Redux and Pondimin as a good example.

Penna continued, "I think that in a couple of years, once we are able to hook together data bases about patients-such that you can tie together patients' drug exposure, physician office visits, hospitalization data, physical therapy, utilization, everything that happens to a patient-then you can tie all of it together into something from which you can extract information. We can go in and say, 'OK computer, identify a population of patients with this disease who are treated with treatment A, compare that with a similar population of patients with a similar disease who are exposed to treatment B, and tell us who had the better outcomes.' When it happens, I think we'll be able to much more easily go and determine which drugs work best in which patients."

When asked whether practice guidelines recommending specific drugs as first-line treatment are taken into consideration when evaluating drugs, Penna said committees do look at them, and if a drug is prominent in a nationally recognized protocol, e.g., the Agency for Health Care Policy and Research (AHCPR), then it will carry a lot of weight. The pharmacy and therapeutic (P and T) committees, which make decisions on drug inclusions, try to get as much information as possible in order to make the best decisions.

Outcome Studies Needed

Penna feels that there are too few outcomes studies, and those that are done are not always very good. Often they are biased, if done by a drug company with a clear intent in mind.

"I'm not an outcomes expert," he said. "If I want a really good analysis I'll take it to an expert. When we evaluate a study, we look to see if the results seem to be reasonable and feasible-are the analysis and the conclusions laid out in a logical, easy to follow sequence."

In response to negative consumer reaction to drug formularies, Penna was emphatic that P and T committees have patients' best interests in mind.

"First of all," he said, "P and T committees consist of physicians and pharmacists. We don't have accountants or administrators who are looking at the financial bottom line. We have health care professionals making the decisions. We have experts draft summaries of the drugs, we review the published scientific literature and present it in an unbiased format for a committee to review and draw conclusions.

"There is active debate within these committees about what is the right thing to do: is the evidence good enough? Most consumers think, 'If the FDA approves it, it must be OK. Why don't you cover these drugs?' We're trying to get away from a [physician] saying, 'I like this drug because I tried it on two patients and it was wonderful.' The anecdotal information is interesting, but it's not scientific information; the next 20 patients could all die from this drug.

"The second point," Penna said, "is that P and T committees are conservative! We tend to ask a lot of tough questions, we tend to say 'Let's wait and see; let this product be used for six months in the general community and get some experience with it, and then we'll add it.' My view of pharmaceuticals is that conservative is better. I've seen too many cases where the new wonder drug crashes and burns real fast."

Doing What Is Best

"A third point," Penna added, "is if from a practical standpoint, a new drug is significantly better than an older drug and it cures people, keeps them out of the hospital, does all those things but costs a lot of money, we'd be fools to keep it off the formulary. Ultimately, what saves us the most money is providing the best quality care.

"The fourth point is purely financial. These last few years have been increasingly profitable for pharmaceutical companies. A couple of watchdog groups have determined that the reason drug companies are so profitable is that managed care makes it easier for the general population to have access to drugs. Managed care actually adopts drugs faster than the general community. Over one-half of the people in the United States have a pharmacy benefit. This means they can get drugs with little financial disincentive. The alternative, if we don't manage pharmacy costs and make some tough decisions, is that the drug benefit is going to get priced too high and those who provide coverage will begin dropping it. So, I think that formularies in managed care programs-while it means that some people may not get the drug that they've just seen advertised on TV-means that more people have access to more drugs than they've ever had before."