Physician's Rights Relative to Imposed Administrative Costs
Managed Care Reform
Disclosure of Corporate Ties Affecting Formulary Choices and Drug Substitution
The American Academy of Family Physicians (AAFP):
- recognizes the critical role of proprietary pharmaceutical products in the prevention, treatment and cure of disease;
- values the role of pharmaceutical manufacturers in the research, development and distribution of new therapeutic agents and the education of physicians and others;
- recognizes the physician's responsibility for the appropriate use of pharmaceutical agents through the prescriptive powers vested in them by virtue of their medical license;
- supports assuring access to needed pharmaceutical products through their inclusion in benefit programs of public and private insurance products;
- recognizes the role of appropriately designed restrictive formularies used by providers of pharmacy benefits and third party insurers which have the goal of optimizing clinical outcomes while minimizing overall health care costs;
- recognizes that decisions about the inclusion of drugs on formularies must be made with a proper balance of cost, efficacy, quality, and ease of use to optimize individual outcomes in the context of resource conservation;
- realizes that "direct to consumer" advertising by pharmaceutical manufacturers has created an "induced demand" for these products which physicians must manage in the provision of patient care;
- has great concern about the extensive administrative time and expense required by family physicians to comply with multiple and conflicting restrictive formularies.
The American Academy of Family Physicians (AAFP) is concerned that certain ownership and/or financial arrangements among pharmaceutical manufacturers, pharmacy benefit management (PBM) organizations, mail order companies, health plans, retail pharmacies, pharmacists and other provider groups could create “conflicts of interest” or financial incentives which may not be in patients’ best interests, e.g. manufacturer discounts and/or rebates for the utilization of certain drugs. They may also result in compromised quality of care, excessively high premium, and “out of pocket” costs.
The AAFP has developed the following set of “Principles for the Development and Management of Patient-Centered Formularies” for the consideration of, and use by, family physicians, other providers and the health plans with which they contract.
- Formularies should be developed using a collaborative process involving physicians, pharmacists, patients and others possessing information concerning the science and economics of pharmaceutical products.
- Health plans should constitute Pharmacy and Therapeutics (P and T) committees with plan payers, members and local practitioners who are credible and respected to review, revise as appropriate and approve formularies, including those provided to the health plan by contracted PBMs.
- All P and T committee members should be required to disclose significant pharmaceutical company-related stock holdings.
- Formulary design should be patient-centered, fiscally responsible and evidence-based. Drug selection should be based on clinical outcomes, clinical comparability, safety, patient ease of use and bioequivalancy with drug unit cost being a secondary consideration.
- Patients stable on drugs should not be changed to a new product based solely on economic considerations.
- Formularies should be designed to provide a physician- and patient-friendly option to prescribe and receive drugs not included on the formulary using patient-centered, clinically-based criteria.
- Formularies should be designed to offer patients multiple levels of drug choice (from more to less restrictive) with accompanying patient cost sharing levels to account for variables including patient preferences (e.g., “direct marketing-induced” demand.)
- Health plans and PBMs should provide drug utilization and cost information to physicians in clear and understandable reports that are useful for physicians in affecting positive change in their prescribing behavior.
- Sufficient information concerning the pharmacy benefit management design should be provided by health plans to physicians and patients in a clear and useful format. (Note: this includes information concerning generic drug and therapeutic substitution policies, deductibles and co-pays, appeal process for adverse decisions, formulary choices, product information, contractual arrangements with a PBM, etc.)
- Formularies should restrict as few classes of therapeutic agents as possible, focusing on those classes of drugs that are the most frequently prescribed, the most expensive or the most frequently “abused,” i.e., to seek “value” in selected therapeutic categories.
- Formulary changes must be made known to physicians and pharmacies prior to implementation. Additionally, the insured patient should be allowed to continue with a previously approved drug until and unless a physician, in consultation with the patient, decides to change to another drug.
- Before formulary changes are made, the total cost to the patient and physician must be considered including staff time and resources, unexpected adverse outcomes, additional office visits and laboratory monitoring.
- Formularies must be “stable” since frequent changes create confusion and frustration for patients and physicians leading to non-compliance, adverse reactions, increased costs and erosion of patients’ confidence. This guideline is not meant to exclude newly FDA-approved drugs or indications.
- Health plan financial incentives to physicians should be assessed in the aggregate across all prescription drugs and related to cost-effective practice and positive clinical outcomes rather than to formulary compliance or cost as the sole criterion. Additionally, physician drug utilization reviews (DUR) conducted by PBMs or health plans should focus on these same criteria.
- Physicians should have access to reasonable due process for appeals of adverse decisions without concurrent concerns about institutional sanctions or economic penalties for “cost over runs” unless clearly related to evidenced-based clinical outcomes data.
- The pharmaceutical industry, PBMs, health plans and physicians should work collaboratively to conduct pharmacoeconomic research, publicly share the results and strive to bring as much uniformity and consistency to drug formularies as is possible within a competitive health care marketplace.
- To help assure patient safety, any direct to consumer advertising for a medication should not occur until the medication has been on the market for a minimum of one year.
- Physicians should be paid for services provided to patients in response to a request from a payer or third party administrator or in response to formulary changes that require a change in prescription medication, whether or not those services are provided in a face-to-face encounter.