VA Drug Formulary:

Drug Review Process Is Standardized at the National Level, but Actions Are Needed to Ensure Timely Adjudication of Nonformulary Drug Requests

GAO-10-776: Published: Aug 31, 2010. Publicly Released: Aug 31, 2010.

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In 2009, the Department of Veterans Affairs (VA) spent nearly $4 billion on prescriptions for veterans. In general, VA provides drugs on its national formulary. However, all VA medical centers must have a nonformulary drug request process that is overseen by their regional Veterans Integrated Service Network (VISN). This report responds to a House Committee on Appropriations report directing GAO to review VA's formulary process and to an additional congressional request. Specifically, GAO reviewed (1) the process VA uses to review drugs for its national formulary, (2) the approaches VISNs and medical centers take to implementing the nonformulary drug request process, (3) the extent to which VA ensures the timely adjudication of nonformulary drug requests, and (4) the mechanisms VA has in place to obtain beneficiary input on the national formulary and make the drug review process transparent. GAO reviewed VA policy guidance and VA's pharmacy-related information technology (IT) initiatives, analyzed 2008 and 2009 drug review data and 2009 nonformulary drug request data, and interviewed VA officials from the national level, each VISN, and a judgmental sample of four medical centers.

VA uses a standardized process to review drugs for its national formulary that is coordinated at the national level by its Pharmacy Benefits Management Services (PBM). The Chief Consultant from VA's PBM told us that most drug reviews are initiated in response to FDA's approval of drugs for use on the market. To begin the process of deciding whether to include a drug on the national formulary, PBM develops evidence-based drug monographs that include information on safety, efficacy, and cost. PBM seeks comments on these monographs from VISN and medical center staff and, when appropriate, subject-matter experts. Once a monograph is complete, PBM sends it to its Medical Advisory Panel and the VISN Pharmacist Executive Committee, which review the monograph and vote on whether to add the drug to the national formulary. According to information provided by PBM, reviews for a majority of the drugs VA considered for addition to the national formulary in 2008 and 2009 were completed within a year of FDA approval, but there were a number of factors, such as safety concerns, that caused some to take longer. VISNs and medical centers vary in how they implement the nonformulary drug request process, including how they adjudicate nonformulary drug requests, collect and report required data to VA's PBM, and address appeals of denied requests. GAO found that IT enhancements could help facilitate more consistent implementation of the process. Although VA is working on replacing its pharmacy IT system, officials could not tell GAO whether components that would support the nonformulary drug request process will be implemented. VA requires that nonformulary drug requests be adjudicated within 96 hours, but it is unable to determine the total number of adjudications that exceed this standard due to limitations in the way data are collected, reported, and analyzed. While the total number of nonformulary drug request adjudications that exceed 96 hours is unknown, GAO found that data reported to VA's PBM on quarterly average adjudication times for medical centers are sufficient to demonstrate that not all requests are adjudicated within this time frame. Additionally, PBM does not have the framework in place to ensure that appeals of denied nonformulary drug requests are resolved in a timely fashion. VA obtains input from beneficiaries on the national formulary mainly through Veterans Service Organization meetings and complaints, though some VISNs have taken additional steps to seek this input. Officials from VA's PBM told GAO that they make the drug review process transparent to veterans through national formulary information available on PBM's Web site, and some VISN and medical center officials described undertaking other activities to educate beneficiaries. At the national level, VA officials are considering options for increasing beneficiary input on the national formulary and improving the transparency of the drug review process, and most VISN and medical center officials told us there could be benefit to doing so. GAO recommends that VA establish additional mechanisms to ensure nonformulary drug requests are adjudicated in a timely fashion. VA concurred with this recommendation.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To provide assurance that requests for nonformulary drugs are adjudicated in a timely fashion, the Secretary of Veterans Affairs should direct the Under Secretary for Health to establish mechanisms to ensure that appeals of denied nonformulary drug requests are tracked.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In the second quarter of fiscal year 2011, the Department of Veterans Affairs (VA) implemented a new, web-based nonformulary request data collection process for each medical center to accurately account for (1) the number of nonformulary requests, including those adjudicated in more than 96 hours, and (2) appeals of nonformulary requests. This process includes the collection of information at the request-level and a quarterly analysis of all information collected by VA's Pharmacy Benefits Management Services. The PBM then posts the analyses to a website that is accessible to the 21 regional Veterans Integrated Service Networks(VISN)and medical centers, reviews the analyses at meetings with VISNs, and follows-up on any medical centers that do not report data or who have concerning trends in their data.

    Recommendation: To provide assurance that requests for nonformulary drugs are adjudicated in a timely fashion, the Secretary of Veterans Affairs should direct the Under Secretary for Health to establish mechanisms to ensure that reported nonformulary drug request data are collected at the request-level and analyzed by VA's PBM, VISNs, and medical centers at this level.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In the second quarter of fiscal year 2011, the Department of Veterans Affairs (VA) implemented a new, web-based nonformulary request data collection process for each medical center to accurately account for (1) the number of nonformulary requests, including those adjudicated in more than 96 hours, and (2) appeals of nonformulary requests. This process includes the collection of information at the request-level and a quarterly analysis of all information collected by VA's Pharmacy Benefits Management Services. The PBM then posts the analyses to a website that is accessible to the 21 regional Veterans Integrated Service Networks(VISN)and medical centers, reviews the analyses at meetings with VISNs, and follows-up on any medical centers that do not report data or who have concerning trends in their data.

    Recommendation: To provide assurance that requests for nonformulary drugs are adjudicated in a timely fashion, the Secretary of Veterans Affairs should direct the Under Secretary for Health to establish mechanisms to ensure that reported nonformulary drug request data are accurate and complete.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In the second quarter of fiscal year 2011, the Department of Veterans Affairs (VA) implemented a new, web-based nonformulary request data collection process for each medical center to accurately account for (1) the number of nonformulary requests, including those adjudicated in more than 96 hours, and (2) appeals of nonformulary requests. This process includes the collection of information at the request-level and a quarterly analysis of all information collected by VA's Pharmacy Benefits Management Services. The PBM then posts the analyses to a website that is accessible to the 21 regional Veterans Integrated Service Networks(VISN)and medical centers, reviews the analyses at meetings with VISNs, and follows-up on any medical centers that do not report data or who have concerning trends in their data.

    Recommendation: The Secretary of Veterans Affairs should direct the Chief Information Officer to clarify plans regarding when functionality related to the nonformulary drug request process will be implemented under PRE.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Not Implemented

    Comments: In July 2013, VA responded that "The effort to develop a non-formulary drug request process functionality is not in the current FY13 PRE project plan. As described in VA's November 2012 update response, it was removed from PRE and included within the scope of VA/DoD iEHR in FY13. Since that response, VA and DoD have made decisions on their respective iEHR "core" direction. These decisions have moved execution of Pharmacy projects back to the respective agencies. All pharmacy system enhancements, to include efforts to develop a non-formulary drug request process functionality, are in a planning state, and VA is not able to provide a timeline for achieving this functionality."

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