VA Pharmacy Benefits Management Services and the Institute for Clinical and Economic Review (ICER) recently announced a collaboration in which the VA will use the ICER’s drug assessments as part of its formulary development and price negotiations. This type of relationship might be normal outside of the United States (for example, in the United Kingdom, Germany, and Australia), where input from governmental health technology assessment organizations is used in determining health care coverage decisions. However, in the United States—with our multipayer health care system covering different populations (for better or worse)—this represents the first instance in which the federal government is incorporating nonpopulation-specific assessments and cost-effectiveness-based price benchmarks into drug coverage and purchasing decisions. The ICER assessments are neither specific to veterans nor the particular characteristics of the VA health care system. As the VA considers how to use this information, caution is warranted.
The VA already has a very restrictive formulary, covering only 59 percent of the top 200 prescription drugs in the United States compared to Medicare prescription drug plans that cover about 85 percent. Furthermore, the VA is statutorily guaranteed substantial price discounts on prescription drugs, on top of which it negotiates further discounts as part of creating its formulary. The end result is that the VA receives the steepest discounts in the country.
The current and prior administrations have placed a high priority on improving VA health care. While substantial progress toward better access has been made, more work could be done to make the VA’s formulary decision making more transparent. There are, however, important factors to consider and questions to be asked about the use of the ICER assessments in VA decisions: Will these assessments lead to improvement in our veterans’ access to needed care? Are more rational drug decisions likely to result? And, will veterans’ health improve because of this approach?
The answer to all these questions is the same: Perhaps, but only if the following considerations are addressed. Continue Reading on HealthAffairs.com