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DoD Pharmacy Enterprise:

2017 and Beyond

Ann D. McManis, Lt Col, USAF, BSC Deputy Chief, Pharmacy Purchased Care Branch

Pharmacy Operations Division J3 Operations Directorate

(The information in this briefing is presented by the author/presenter and does not represent the position of the Department of Defense; the data is presented for illustration and may contain estimates and assumptions)

AMSUS Sustaining Members Meeting

23 March 2017

“Medically Ready Force…Ready Medical Force” 1

UNCLASSIFIED

UNCLASSIFIED

The “Why”

2

Supported: MHS Strategy/Quadruple Aim. Supporting: DHA!

Increased Readiness Ensuring that the total military

force is medically ready to deploy and that the medical

force is ready to deliver health care anytime, anywhere in support of the full range of

military operations, including humanitarian missions.

Better Care Providing a care experience that is patient and family centered, compassionate, convenient, equitable, safe and always of the highest

quality.

Better Health Reducing the generators of ill health by encouraging healthy behaviors and decreasing the likelihood of illness through focused prevention and the development of increased

resilience.

Lower Cost Creating value by focusing on quality, eliminating waste, and

reducing unwarranted variation; considering the total cost of care over time, not just the cost of an individual health

care activity.


DoD Pharmacy Enterprise Operations Snapshot Fiscal Year 2016

∎ Manage 9.4M beneficiaries with an $7.9 Billion Spend plan (FY16)

708 military pharmacies worldwide

~58,000 retail pharmacies

Mail order

∎ Pharmacy Enterprise Support Activity

Guided by Pharmacy Work Group

Building from Shared Service Initiative - Integration

∎ Coordinate pharmacy efforts with VHA

Federal Pharmacy Executive Steering Committee

Optimize Coordination


Active Duty

Active Duty

Family Members

Other

Retirees & Family Members

< 65

Retirees & Family Members

65+ 23.7%2.2M

16.4%1.5M

21.4%2.0M

33.2%3.1M

5%0.5M

FY16 Direct and Purchase Sector Care Pharmacy Spend Plan Tracking

5

Target = $ 7,995M

$707

$1,377

$1,892

$2,638

$3,384$3,910

$4,631 $5,303

$5,784

$6,445

$7,234$7,778

$670 744 745 746 811 721 672 706 660 790 788

$

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Mill

ion

s

Retail Mail MTF FY16 Target Cumulative Expenditures

Go

od

Spend at MTF from Prime Vendor; Retail and Mail from PDTS; Retail refund collections are included

as decrement in each fiscal quarter; (FY Refund through Sep 2016 = $ 982.7M)

Target is based on FY16PB, OCO, MERHCF budget projections after Retail Refunds

(from DHA Resource Management)

Target $ 666 $ 1,333 $ 1,999 $ 2,665 $ 3,331 $ 3,998 $ 4,664 $ 5,330 $ 5,997 $ 6,663 $ 7,329 $ 7,995

Spend $ 707 $ 1,377 $ 1,892 $ 2,638 $ 3,384 $ 3,910 $4,631 $ 5,303 $ 5,784 $ 6,445 $ 7,234 $ 7,778

TPharm Vaccine Program (CY 2010 through FY 2016)

∎ Access to vaccines at 45,413 retail network pharmacies at $0 copay (preventative services)

∎ Retail vaccinations visible on PDTS & ALTHA med list

∎ AD: Vaccine Record

∎ 3.4 M vaccines administered at retail pharmacies

6

Vaccine Type Total

H1N1 16,683 Haemophilus influenzae 97

Hepatitis A 6,235

Hepatitis A/B Combo 4,100 Hepatitis B 6,877

Hepatitis B, Diphtheria, Pertussis, Polio 85 Human Papillomavirus 4,501

Human Papillomavirus (Gardasil, Cervarix) 1,070 Influenza 2,623,460

Measles, Mump, Rubella 4,568 Measles, Mumps, Rubella, Varicella 75

Meningococcal 13,504

Pneumococcal 171,152 Polio 236

Rotavirus 112 Rotavirus, Tetanus 5

Tetanus, Diphtheria 1,649 Tetanus Booster 349

Tetanus, Diphtheria, Pertussis 124,438

Tetanus, Diphtheria, Pertussis, Polio 114 Tuberculosis (BCG) 28

Varicella 3,796 Zoster 385,768

Total 3,368,902

DoD Team Pharmacy – 2017 Collaborative / Integrated / Consistent Excellence ∎ Essential – continue the excellence of current projects

Pharmacy Enterprise Support Activities

MHS Genesis Implementation (DoD’s new Electronic Health Record)

Opioid & Controlled Substance Management

Medication Therapy Management (MTM) pilot

Adherence

Formulary Management

Enhanced MTF and Mail (EMM)

Specialty Medication Management

Innovator Drug Program

7

DoD Pharmacy Enterprise Services

8 “Medically Ready Force…Ready Medical Force”

A collaborative effort with the Services to improve the patient experience and reduce unwarranted variation through deliberate planning, consistent messaging and uniform metrics –

Optimally Integrating Direct and Purchased Pharmacy Benefit Delivery

GOAL: To improve patient outcomes while reducing overall healthcare costs through the delivery of optimal pharmaceutical care

DoD Pharmacy Enterprise Operations

∎ Pharmacy Shared Services – from 2013-16 – Exceeded every target Improved patient access – 100% of MTFs can accept electronic

prescriptions from a downtown provider

Preserved the benefit - Integrated initiatives improved value and gleaned $417.9M cost avoidance in FY-16

‒ Improved logistics practices, Point Of Service management and Formulary Management

‒ Contract compliant purchasing- Over 20% Improvement

Addressed Compound Pharmacy Explosion – Sustained Management


1

0

Pharmacy Savings Index (PSI) FY16 Overall Target – $230M

10

$34.3$68.8

$105.1

$140.2$174.0

$209.8

$245.4$281.2

$316.7$353.2

$389.2$417.9

$ 230M

$34.5$36.2 $35.1 $33.9 $35.7 $35.6 $35.9 $35.5 $36.5 $36.0

$28.7

$

$100

$200

$300

$400

$500

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Mill

ion

s

#1 - Retail Rx to Mail/MTF #2 - Formulary Management

#3 - Brand to Gen & Nat'l Contracts (lagged one month) #4 - Formulary Status of New Drugs

#5 - Automation Central Contracts FY16 Total Estimated Cost Savings

FY16 Target

Go

od

$230M = $133 MERHCF

and $97M DHP

Target ( $M ) $ 19 $ 38 $ 57 $ 77 $ 96 $ 115 $ 134 $ 153 $ 172 $ 192 $ 211 $ 230

Cost Savings $ 34 $ 69 $ 105 $ 140 $ 174 $ 210 $ 245 $ 281 $ 317 $ 353 $ 389 $ 418

Current DoD Enterprise Initiatives

∎ e-Prescribing

enables civilian providers to electronically transmit prescriptions to Military Treatment Facility (MTF) pharmacies

Available at all U.S. MTFs (including Guam & Puerto Rico) that currently accept civilian prescriptions (161)

Received over 4.6M prescriptions via eRx through January 2017

∎ Clinical Pharmacists utilized in direct health care

Patient Centered Medical Homes


∎ MHS GENESIS go-live

Fairchild AFB: Feb 7, 2017

Current Schedule (may change)

Oak Harbor: May 13, 2017

Bremerton: Jun 3, 2017

Madigan: Jul 15, 2017

∎ Initial implementation at Fairchild

Ambulatory only capabilities

Allows for the Program Office and the Services/ Site ~90 days to focus on Ambulatory Capabilities

Ambulatory Pharmacy Capabilities

Interfaces – Innovations, AudioCARE, Inbound Electronic Prescribing, & PDTS

MHS GENESIS (Cerner) Update

∎ Future schedule (next 5 waves) (subject to change)

November 2018 NMC San Diego

February 2019 Camp Pendleton, Eielson AFB, Elmendorf AFB, Ft. Wainwright, Ft Richardson, Ft Greely

March 2019 Beale AFB, Edwards AFB, Los Angeles AFB, Nellis AFB, Vandenberg AFB, Travis AFB, Mountain Home AFB, McClellan AFB, Ft Irwin, Monterey, Umatilla Army Depot, 29 Palms, Seal Beach, Port Hueneme, Point Mugu, Bridgeport, Fallon, Ridgecrest, NAS LeMoore

May 2019 Cannon AFB, Davis Monthan AFB, Grand Forks AFB, Hill AFB, Holloman AFB, Kirtland AFB, Luke AFB, Malmstrom AFB, Minot AFB, Offutt AFB, Ft Bliss, Ft Huachuca, White Sands, Yuma

July 2019 Buckley AFB, Ellsworth AFB, FE Warren AFB, McConnell AFB, Peterson AFB, Schriever AFB, Air Force Academy, Whiteman AFB, Ft Carson, Ft Leavenworth, Ft Leonard Wood, Ft Riley

MHS GENESIS (Cerner) Update

Drug Take Back – Implementing New DEA Guidance

The DOD is committed to ensuring safe disposal of unwanted prescription drugs and to reduce the opportunities for abuse, misuse, use for suicide and suicide attempts, and accidental poisoning

∎ Drug Take Back Program DoD Instruction (DoDI) 6025.25 Drug Take Back Program, published April 2016

∎ Utilization Data (through October 31, 2016)

Air Force- 44 receptacles, 4,550 envelopes purchased, 22,226lbs

returned

Army- 55 receptacles, 5,700 envelopes purchased, 17,613lbs returned

Navy- 2 receptacles, 4,925 envelopes purchased, 140lbs returned

NCR- 2 receptacles, 2352lbs returned


Naloxone Prescribing and Dispensing:

∎ POD developing Guidance for MTFs MHS-wide (DHA Technical Manual)

Naloxone prescribing and dispensing by pharmacists

General framework applicable to all MTFs

Defines risk criteria, provide patient education materials, and outlines procedures

∎ Collaborate with Clinical Pharmacy Sub-Working Group

Service specific and MTF-level concerns

Review and comments

∎ Final Publication targeted for early 2018

Current DoD Enterprise Initiatives: Opioid Management

∎ MHS Opioid Registry

integrates demographic, clinical and pharmaceutical data at the patient level using evidence-based methodology to flag and track beneficiaries displaying high-risk behaviors

∎ Opioid Safety Edit in the Pharmacy Data Transaction Service

∎ The Prescription Monitoring Program (formerly known as the 1-1-1 program

Current DoD Enterprise Initiatives: Opioid Management

Medication Therapy Management (MTM) Pilot

∎ Congressionally directed pilot to determine feasibility and desirability of including MTM as part of TRICARE benefit

∎ Two year pilot

Sites: 3 location types (LT)

LT 1: PCMH empaneled beneficiaries using an MTF pharmacy

LT 2: Beneficiaries managed by retail providers but use an MTF pharmacy

LT3: Beneficiaries managed entirely in the retail network

Each Service (Army, Navy, Air Force) will select a site for LTs 1 & 2

Outcomes metrics will include cost and efficacy


Adherence Initiatives

Pharmacy Quality Alliance (PQA)

∎ Benchmark medication-use measures for medication safety, adherence, and appropriateness

∎ Quality improvement indicators

∎ Free membership/licensure to government organizations In the process of acquiring licensure and all metrics

Implemented three adherence measures thus far

∎ Standard measures used by CMS and Health Insurance Marketplace

Adjusted Clinical Groups (ACG)

∎ Available on CarePoint MHSPHP to patient level

∎ Predictive measures for cost and risk

∎ Several adherence measures – some disease specific

∎ Working with Dr. Carnahan to expand use for clinicians

∎ Integrating PQA measures with ACG measures to enhance standardized reporting and actionable measures


∎ Facilitate access to real-time pharmacy metrics and patient level measures through CarePoint

∎ Support healthcare initiatives by providing actionable, predictive, and longitudinal adherence data

∎ Integrate Adjusted Clinical Groups (ACG) with Pharmacy Quality Alliance (PQA) metrics.

∎ Leverage PQA and ACG to support Polypharmacy, MTM, and Adherence initiatives

∎ Adapted PQA adherence algorithm for proportion days covered (PDC)

Enhanced MTF and Mail Order Pharmacy Program

19

∎ Beginning October 1, 2015 TRICARE beneficiaries were required to refill select brand name maintenance drugs at the MTF Pharmacy or the TMOP

Does not apply to Active Duty Service Members or beneficiaries with Other Health Insurance

Does not apply to beneficiaries living overseas (unless there is a retail pharmacy network: e.g. Hawaii, Guam, Puerto Rico, and Alaska)

Waivers are available for certain circumstances (nursing home residents, emergency, or personal hardship). Beneficiaries must contact Express Scripts directly to request the waiver

∎ Beneficiaries are allowed two 30-day “courtesy fills” at a retail pharmacy until they are responsible for 100% of the cost

“Medically Ready Force…Ready Medical Force”

Enhanced MTF & Mail Metrics


∎Goals

Ensure DoD growth rate of specialty spend is at or below commercial rate, while optimizing patient outcomes by:

Continuing to study specialty medication outcomes to improve formulary decision-making and beneficiary health

Developing and improving clinical and economic processes to support patient delivery

Ensuring Uniform Formulary process is responsive to patient access to specialty pharmaceuticals.


Specialty Medication Management

Top 25 UF Classes FY16 ($M) – Specialty in Red Rank FY14 FY15 FY16 FY14-16

1 ONCOLOGICAL $415 $501 $572 ↑38%

2 DIABETES NON-INSULIN $245 $293 $311 ↑27%

3 TIBs $272 $296 $307 ↑13%

4 PPIs $266 $264 $251 ↓5%

5 NARCOTICs $260 $262 $231 ↓11%

6 ANTIDEPRESSANTS / NON-OPIOID $302 $254 $222 ↓26%

7 ADHD / WAKEFULNESS $243 $246 $217 ↓11%

8 ANTILIPIDEMICS-1 $289 $228 $213 ↓26%

9 MS $190 $216 $192 ↔

10 ANTICOAGULANTS $152 $179 $191 ↑24%

11 INSULINS $175 $183 $190 ↑9%

12 PAIN AGENTS (mostly NSAIDs) $236 $227 $171 ↓27%

13 RENIN-ANGIOTENSIN $253 $216 $168 ↓34%

14 PULMONARY-1 (ICS, ICS/LABA, SABA) $225 $142 $137 ↓39%

15 ANTIBIOTICS $196 $153 $125 ↓37%

16 ANTIPSYCHOTICs $184 $188 $115 ↓37%

17 BETA BLOCKERS $113 $119 $112 ↔

18 PULMONARY-2 (LAMA, SAMA, etc) $124 $122 $112 ↓10%

19 ALZHEIMERS $110 $158 $104 ↔

20 ANTIRETROVIRALS $77 $88 $102 ↑35%

21 ANTICONVULSANTS-ANTIMANIA $98 $104 $98 ↔

22 ANTI-INFLAMM IMMUNOMOD OPHTH(mostly Restasis)

$76 $93 $96 ↑26%

23 ACNE AGENTS $86 $95 $95 ↑11%

24 CORTICOSTEROIDS IMMUNE MOD $88 $96 $94 ↑7%

25 PDE-5 INHIBITORS $76 $86 $88 ↑17% Adjusted for retail refunds, MTF PV cost per unit, Mail PV cost per unit; includes COB & paper claims at retail, mail, MTFs

#12 in FY15

#16 in FY15

#15 in FY15

Unit Cost 30DE

FY14 -16

Top 25 Drugs, FY16 ($M) – Specialty in Red Rank FY14 FY15 FY16 Total Cost

1 ESOMEPRAZOLE (Nexium) $147 $146 $147 ↔

2 LENALIDOMIDE (Revlimid) $81 $94 $108 ↑33%

3 ADALIMUMAB (Humira) $107 $101 $95 ↓11%

4 ETANERCEPT $90 $95 $87 ↔

5 PREGABALIN (Lyrica) $62 $74 $84 ↑35%

6 CYCLOSPORINE (mostly Restasis) $60 $77 $80 ↑33%

7 RIVAROXABAN (Xarelto) $56 $70 $72 ↑29%

8 INSULIN GLARGINE, HUM.REC. ANLOG $72 $70 $71 ↔

9 LIDOCAINE (mostly patch) $54 $57 $68 ↑26%

10 ARIPIPRAZOLE (Abilify) $121 $132 $63 ↓48%

11 METHYLPHENIDATE HCL $68 $68 $63 ↓7%

12 APIXABAN $20 $37 $62 ↑211%

13 TIOTROPIUM (Spiriva) $76 $70 $62 ↓19%

14 SITAGLIPTIN (Januvia) $57 $62 $62 ↑7%

15 ROSUVASTATIN(Crestor) $81 $63 $61 ↓25%

16 OXYCODONE HCL $68 $69 $60 ↓12%

17 MEMANTINE HCL (Namenda, Namenda XR) $66 $74 $57 ↓13%

18 DIMETHYL FUMARATE (Tecfidera) $50 $62 $55 ↑10%

19 EPINEPHRINE $38 $46 $53 ↑37%

20 LIRAGLUTIDE $38 $47 $52 ↑39%

21 LEDIPASVIR/SOFOSBUVIR (Harvoni) - $147 $52 -

22 EZETIMIBE (Zetia) $43 $43 $51 ↑20%

23 INSULIN DETEMIR $24 $38 $46 ↑89%

24 TADALAFIL $28 $36 $45 ↑59%

25 DEXTROAMPHETAMINE/AMPHETAMINE $51 $50 $44 ↓14% 24 Adjusted for retail refunds, MTF PV cost per unit, Mail PV cost per unit; includes COB & paper claims at retail, mail, MTFs

Unit Cost 30DE

FY14 -16

FY16 Total Spend

FY13 & 14 based on 4QFY14 Specialty Agent Reporting List; FY15 on 4QFY15 list; FY16 on 4QFY16 list;

totals adjusted for retail refunds (3QFY16 refund per unit applied to 4QFY16 data , copays, and against PV cost per unit for MTF and mail

FY13 ($M) FY14 ($M) FY15 ($M) FY16 ($M)

2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q

Non-specialty 1349 1388 1335 1364 1521 1431 1319 1155

Specialty 304 332 372 425 495 496 494 490

Percent Specialty (excluding compounds, paper claims, COB)

18.4% 19.3% 21.8% 23.8% 24.6% 25.7% 27.2% 29.8%

Specialty vs. Non-Specialty Spend Excluding compounds, OHI, paper claims

Total Estimated Spend by Quarter, FY13-16

Non-specialty

FY16 Total Spend by POS

Specialty

30d Rxs

Specialty Spend by UF Class, FY14-16

26

$29

$50

$51

$48

$56

$59

$62

$69

$76

$62

$89

$69

$76

$88

$102

$108

$191$86

$190

$216$192

$272

$296$307

$376

$452 $531

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2014 2015 2016

$ M

illio

ns

ONCOLOGICAL AGENTS

TARGETED IMMUNOMODULATORY BIOLOGICS

MULTIPLE SCLEROSIS AGENTS

HEPATITIS C AGENTS

ANTIRETROVIRALS

ANTIHEMOPHILIC FACTORS

PULMONARY ARTERIAL HYPERTENSION

ENDOCRINE AGENTS MISCELLANEOUS

IMMUNOLOGICAL AGENTS MISCELLANEOUS

ANTICOAGULANTS

NEUROLOGICAL AGENTS MISCELLANEOUS

GROWTH STIMULATING AGENTS

OSTEOPOROSIS AGENTS

PULMONARY MISCELLANEOUS

ATTENTION DEFICIT HYPERACTIVITY DISORDER-WAKEFULNESS PROMOTING AGENTSOPHTHALMIC AGENTS MISCELLANEOUS

EXCLUDED FROM THE PHARMACY BENEFIT

WHITE BLOOD CELL STIMULANTS

$1572M, ↑26%

$1913M, ↑22%

$1962M, ↑3%

Based on Specialty Agent Reporting List (updated through 4QFY16); adjusted for retail refunds & MTF cost per unit

Formulary Management: DoD Pharmacy and Therapeutics Committee

∎ Integrating Evidence Into Practice Decisions –

Achieving Results ∎ Comprehensive, Integrated

Evidence-Based Clinical and Economic Review

∎ Applicable to all 3 Points of Service – Focus on Access / Optimizing Clinical and Economic Outcomes

∎ Predictable Cycle 8-week timeline

Communication


Step 1: Market analyses, update drug classes and set strategy

Step 3: UF Clinical effectiveness evaluation

Step 6: DoD P&T Committee meeting

Step 7: Beneficiary Advisory Panel (BAP) meeting

Step 8: Director, DHA signs P&T Committee minutes after considering BAP comments

Step 2: Obtain price quotes from manufacturers

Step 9: Implementation of formulary changes

Step 4: UF Cost effectiveness evaluation

Step 5: Innovators identified, clinical and cost effectiveness evaluations completed

Innovator Drug Initiative – Better!

28

∎ Previous process

Newly FDA approved drugs UF tier two

Patients stabilized on new therapies

DoD P&T review 6-18 months after launch – changes…

∎ Published Rule 2015

Newly FDA approved innovator drugs in pending status

Availability comparable to non-formulary drugs

Fast track review required at DoD P&T – "120 day rule"

Tier status/criteria designated rapidly – changes reduced

∎ Pricing – FSS, DAPA; Working on “VARR”-like opportunity

“Medically Ready Force…Ready Medical Force”

29

Innovator Drug Program

Newly Approved Innovator Drugs New Drug Application (NDA)*

New Molecular Entity New Active Ingredient New Dosage Form New Combination

Biologic License Application (BLA)

APPROVAL DATE

Formulary Management Branch Clinical and Cost Review

P&T COMMITTEE**

Tier Status Placement MN, QLs, PAs, Implementation Period

Beneficiary Advisory Panel Concur/Non-concur: Tier Status PA Criteria Implementation Period

DHA Director — final approval authority

ESI processes claims according to tier status

Pending Tier Status No longer automatically UF Tier 3 Coverage

*including but not limited to **may be deferred to subsequent meeting if no cost information available

DoD Team Pharmacy – On to 2018 Collaborative / Integrated / Consistent Excellence

∎ Projects Under Consideration / Development - Founded on the goal of optimal patient care!

Continued Specialty Pharmaceuticals Management

Antibiotic Stewardship Programs

DoD/VA continuity of care (psychoactive therapy)

Exploring participation by DoD in States’ PDMP (Prescription Drug Monitoring Programs)

Value-based and quality outcomes healthcare

Expand Clinical focus…..and more!

30

Shared Opportunities and Questions

∎ Exploration of New Partnership Opportunities Bid Processes (eBidding; Condition Sets, etc)

Driving Patient Outcomes (tools, measures)

Optimizing Investments

cost, adherence, clinical integration, outcomes

∎ Performance/Outcome Based Contracting

∎ Receive Your Input - Web capabilities; Forums

∎ Focused Communication During Bid Cycles

Flow through Contracting Officer

∎And Now Your Questions…


Questions

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