Chairman Michaud, Ranking Member Brown and distinguished Members
of the Subcommittee, on behalf of National President John Rowan,
our Board of Directors and members, I thank you for giving Vietnam
Veterans of America (VVA) the opportunity to testify today regarding
the “ Is the VA Meeting the Pharmaceutical Needs of Veterans?
An Examination of the VA National Formulary, Issues of Patient Safety,
and Management of the Pharmacy Benefits Program.”
In May of this year of this year VVA wrote to Chairman Filner as
part of VVA’s answer to his question about issues that need
to be addressed by the House Veterans Affairs Committee VVA responded
with five issues, one of which is described below:
“Pharmacy Service – the formulary is much too restrictive
(and much more restrictive than either DOD or Medicare) on the theory
that they are going to save a lot of money on medications. However,
they often save pennies and spend big dollars because they scrimp
on medications that could have prevented very costly acute care in-patient
stays. The method of evaluating pharmacists needs to be dramatically
changed from how much in “savings” they produce in comparison
with the national average (which becomes a “race to the bottom”)
to how much did what they do in cooperation with the medical staff
at a given VA Medical Center to promote healing and wellness, and
reduce in-patient acute care stays in the hospital, and/or to prevent
secondary conditions from developing.”
The crux of this issue remains the same some five months later.
In lay terms, VVA believes that what we have at the Veterans Health
Administration (VHA) of the U.S. Department of Veterans Affairs (VA)
is a mentality that tries to reduce front end costs (e.g., pharmaceutical
costs) which they call “cost avoidance,” without regard
to overall impact either on the health of the individuals concerned
or the overall cost impact on the system. In other words, they save
some money by artificially limiting the number and type of pharmaceuticals
that are generally available to clinicians at the VHA facilities,
regardless of whether that in the medium to long-run it causes veterans
to have secondary conditions. This practice is justified on the basis
of “cost effectiveness” within the context of just pharmaceuticals
alone, without regard for the rest of the medical setting.
It is ironic that the Research & Development section of VA is
holding a conference tomorrow in Washington to look at “comparative
effectiveness” in research and in other applications. While
models such as evidence based medicine has a real place, and has
been of significant use especially in treating psychiatric problems,
it has all too often been misapplied to practical allocation of resources,
such as the way in which VHA has
Implemented the formulary at VHA. VVA would suggest that “comparative
effectiveness” be applied to the overall health care system,
in such a way as to focus on “comprehensive effectiveness.”
Frankly, “comparative effectiveness” has been misapplied
to the VA formulary in such a way that it is a “race to the
bottom.” Furthermore, when you are sick, Mr. Chairman, you
are not necessarily in the majority part of the group that inexpensive “drug
A” worked for just as well as the more expensive (usually copyright/patent
protected) “drug B” when the two were tested for efficacy
against each other. The decision of which to offer should be a clinical
decision by the physician in concert with the patient, as to what
is going to work the best for the individual patient. The practical
tools available to a veterans’ physician should not be artificially
limited by what is listed on the VA formulary.
We know if something is not on the formulary, it is very difficult,
if not impossible, for most patients of that physician to get it.
When we raise this issue, VA retorts that any physician can order
any Food & Drug Administration (FDA) approved medication, whether
it is on the formulary or not. While theoretically a physician can
secure medications not on the formulary, as a practical matter it
is inordinately difficult and time consuming to do so, and if a physician
does it too often, they are “counseled” by their supervisor.
VVA has made the point to three of the most recent Undersecretaries
for Health at VA, and to Secretary Peake when he was in office, that
the VA National Formulary decision making process lacks transparency
and public input that would cause them to have justify keeping something
off of the formulary as opposed to putting something on the formulary.
This is just not right, and no way to make public “life or
death” policy decisions. This entire process needs to play
out in the open, in the sunshine, where it can clearly be seen by
the public and by clinicians what is being done and why it is being
done. That is not the case at VHA today.
The VA formulary has just over 1,300 drugs while the average Medicare
Part D formulary has more than 2,000 drugs. Only 38% of the drugs
approved by the FDA in the 1990s, and 19% of the drugs approved since
2000, are on the VA National Formulary. It is clear to us that the
VA has a policy bias toward generics and those drugs whose patents
have expired, making them cheaper. This is despite the fact that
the VA has the best price in the world on pharmacy medications.
While we do not believe that “newer” is always better,
that is a clinical decision that the veteran’s individual physician
should be making, and not “the green eye shade” fiscal
guys in a back room somewhere.
The restrictive VA formulary could have a deleterious affect on
the longevity and quality of life of veterans. Just one example of
this is how slow VHA was to add the long-lasting insulin to the VHA
formulary (and then only after significant pressure from VVA and
from this committee), and the fact that many of the most effective
treatments for diabetes, many of which have appeared on the market
since 2000, are still not available on the VA formulary. The average
beneficiary has better access to newer diabetes and heart disease
drugs through Medicare Part D and Medicaid than does the average
veteran through the VA. This is just wrong, and needs to be fixed
by broadening the VA formulary, and by opening up this whole process.
The toughest things to get on the VA formulary of all are the most
innovative “new molecular entities” almost all of which
are still under patent, and therefore avoided by the VA decision-makers.
In this instance there is apparently an evidence based process, but
it can be (and often it is) vetoed by the pharmacy people strictly
on the basis of the cost of the medication, and not by any part of
an overall decision as to what is best for the veteran’s overall
health, nor the like total cost to the medical system of NOT providing
this medications to veterans who would be helped by it.
By restricting access to innovative drug therapy for chronically
ill veterans, VVA believes that the overly restrictive VA formulary
may result in less than optimal health outcomes. Said another way,
it is our belief that many of the VA Medical Centers are not doing
such a great job of controlling the measures of diabetes A1C, partly
because of the restrictive policies on medications. This results
in “spikes” that are what cause the secondary conditions
and/or very costly inpatient hospitalization stays in some of the
more than a million diabetics being treated by VA. For this reason,
it also results in the veteran developing secondary conditions, which
are also service connected and result in higher monthly payments.
But, obviously, the key thing here is the diminishment of the quality
of life for the individual veteran.
While the 2000 Institute of Medicine (IOM) study of the then newly
implemented (1997) VA National Formulary … “found that
the VA National Formulary is not overly restrictive, and the limited
available evidence suggests that it has probably meaningfully reduced
drug expenditures without demonstrable adverse effects on quality.”
However, the IOM report findings continue: “The (IOM VA Formulary
Study) committee also concluded that there are manifold opportunities
to improve the management of the formulary system use by the VHA.
The National Formulary lacks essential systems to assure that new
drugs are expeditiously reviewed for inclusion, and that a responsive
process for assuring access to medically necessary exceptions to
the formulary is consistently in place system-wide, that therapeutic
interchange is accomplished in a flexible and consistent way, sensitive
to patient risk, across the far-flung VHA system, and that views
of critical constituencies of both providers and patients are represented
in the management of the National Formulary…”
Perhaps most troubling, the (IOM) committee found “a dearth
of information to evaluate the full impact of the National Formulary
on veterans health and satisfaction, and on the VHA.” That
remains the case today because the VA process takes place in the
back room, out of public view.
Since the time of the IOM Study of the VA National Formulary, the
VA Formulary and Formulary process has only grown more restrictive
and little has been done to address the concerns expressed in the
IOM study. Individual Veterans Integrated Services Network (VISN)
formularies have been eliminated in favor of only a consolidated
VA National Formulary.
The VA Formulary process involves internal Pharmacy and Medical
expertise through its own Medical Advisory Panel (MAP) and is cross
connected to the Department of Defense Pharmacoeconomic Center (DoD PEC)
and Indian Health but does not have outside professional or beneficiary
interest represented, such as the Veteran Service Organizations,
or professional pharmacy and pharmacists organizations, or advocacy
groups like the American Diabetes Association. Appropriate national
level professional organizations that would best represent the
patient as relates to safe and appropriate medication use, could
include representation from professional organizations such
as the American Pharmacists Association (APhA), American Society
of Health-System Pharmacists (ASHP), Academy of Managed Care Pharmacy
(AMCP), and American Society of Consultant Pharmacists (ASCP), as
well as other professional medical societies.
The lack of transparency and insular nature of the VA formulary
decision making process is problematic and leaves unanswered questions
about access to care, chronic disease care, criteria use in reaching
decisions (e.g., costs versus long-term clinical effectiveness).
VA should publish specific drug decision making criteria, including
therapeutic category review schedule, decision making process, Pharmacy
and Therapeutics Committee and Medical Advisory Panel members, meeting
schedules, and discussions of specific decisions. In addition, the
public should have an opportunity to submit information to the VA
Pharmacy and Therapeutics Committee in preparation for each decision
The VA formulary decision making process should also include a VA
Pharmacy Beneficiary Advisory Committee as does the Department of
Defense TRICARE Uniform Formulary process. For example, the Department
of Defense/TRICARE publically
announces in advance its therapeutic class review schedule,
the specific drugs for review, and the criteria for comparing different
drugs. The DoD Pharmacoeconomic Center (PEC) receives pricing
and clinical data from the public including pharmaceutical companies
which are considered by the DoD Pharmacy and Therapeutics (P&T)
Committee. The DoD publishes on its website ( HYPERLINK "http://www.pec.ha.osd.mil/" http://www.pec.ha.osd.mil/)
the recommendation of the P&T Committee, the rationale, and summary
of the data considered.
These recommendations are then reviewed by a DoD Beneficiary Advisory Panel
(BAP; HYPERLINK "http://www.tricare.mil/pharmacy/bap/" http://www.tricare.mil/pharmacy/bap/)
composed of non-government beneficiary, professional and patient
advocacy organization representatives, TRICARE contractors, and others.
These meetings are also announced in advance, open to the public, and
the results are published on the PEC website. The P&T
Committee and the BAP recommendations are then forwarded to the Director
of the TRICARE Management Activity for final decision. In most
cases, newly FDA-approved prescription medications are available
from TRICARE network pharmacies and the mail-order pharmacy program
shortly after they become commercially available. Furthermore,
the public has the opportunity for input at each step in the
decision making process, and it is transparent.
Conversely, the Department of Veterans Affairs National Formulary
decision making process lacks transparency and opportunity for public
input. This results in major disadvantages for VA patients and the
quality of VA healthcare. It can be argued that the overly restrictive
VA formulary as it stands today is significantly distorting the practice
of medicine at the VA, to the detriment of the health of veterans
who seek care there.
Optimally, the Congress will pass a law mandating an open and transparent
process that is modeled on the law for DoD/TRICARE, and is at least
as open and transparent a process (if not more so) than the DoD procedure.
The DoD process automatically includes all medications approved by
the FDA. It is up to managers to justify restricting access to a
medication by removing it from the formulary, and this has to play
out in a public setting with significant input from advocacy groups,
medical societies, and other interested parties. VA should do no
less for our veterans once they take off the uniform.
Short of this much needed comprehensive overhaul or transformation
of the VA formulary, or perhaps while the Committee is working to
draft and secure passage of this legislation, VVA recommends the
following steps be taken immediately by Secretary Shinseki:
Change the performance evaluation criteria for Chief pharmacists
to measure his or her contribution toward the overall wellness of
the patients at a particular Medical Center. There are currently
no such metrics in place, but they can be developed and these contributions
measured, just like almost anything else. (Currently the pharmacists
are rewarded by how much “cost avoidance” they can achieve
in comparison with the national mean. This, of course, means that
it is a “race to the bottom.” It is a testimony to the
professionalism and commitment to good medicine by the pharmacists
that, given the way the system is set up, with the emphasis on cost
containment/cost reduction, that so many veterans do get the right
medication in the right amount when they need it.)
The VA P&T Committee meeting schedule, therapeutic categories
to be reviewed, and review criteria should be publically announced
well in advance of P&T meetings.
The VA P&T Committee should establish a procedure to accept
and consider public input for these Formulary meetings.
The VA P&T Committee should publish its recommendations made
in the last decade with rationale for the conclusions and recommendations
of the Committee.
The Secretary of Veterans Affairs should establish a Beneficiary
Advisory Committee (BAC) of representatives from a representative
sampling of major veterans, patient advocacy, and healthcare professional
groups with the responsibility and authority to
make recommendations on the decisions of the VA P&T Committee
including addition, deletions, clinical use criteria, and preauthorization
requirements on drugs on the VA National Formulary.
Meetings of the VA Formulary Beneficiary Advisory Committee should
be open to the public and the minutes and considerations of all BAC
recommendations published on the VA P&T Committee website in
a timely manner.
Like the DoD Beneficiary Advisory Panel, the VA Formulary Beneficiary
Advisory Committee should include at least 12-15 members and have
the opportunity to make
Recommendations prior to final decision on VA National Formulary
changes and other
pharmaceutical issues. At least two of the following organizations
should be included in the membership of the VA Beneficiary Advisory
Committee, the American Pharmacists Association (APhA), American
Society of Health-System Pharmacists (ASHP), Academy of Managed Care
Pharmacy (AMCP), and American Society of Consultant Pharmacists (ASCP).
The VA Formulary Beneficiary Advisory Committee should have
the authority to recommend to the VA drug categories and new drugs
to be reviewed, changes to the criteria for use, clinical guidelines,
restrictions on use, etc.
The Veterans Health Administration should be required to consider
the recommendations of the VA Formulary Beneficiary Advisory Committee
prior to making final decisions on VA Uniform Formulary including
addition, deletions, clinical use criteria, and preauthorization
The Secretary of Veterans Affairs could do some, all, or most of
the nine steps outlined here above within the scope of his authority.
However, there will be stiff resistance on the part of VHA officials
who like the status quo. All too often, some seemingly do not believe
that they should be answerable to anyone outside of that closed system,
much less individual veterans or veterans’ service organizations.
These folks will have millions of reasons not to change, and perhaps
so will some at the Office of Management & Budget (OMB). They
also have their own constituencies around Washington who will tell
the Secretary that it is “just too expensive” to provide
expensive drugs to veterans. These individuals have had years of
practice in “push back” to prevent any significant change
being accomplished without legislation passing the Congress.
It is our belief that the time is right for this Subcommittee to
take the lead in creating a statutorily directed formulary that is
inclusive as a starting point, that is totally transparent, and that
has to take into account input from stakeholders, both medical professionals
and advocates outside of government. The VA continues to have great “bargaining
power” to secure the best possible prices on each and every
medication, and we believe that the private sector will be reasonable
in this regard. In any case, it is impossible to say “Care
Second to None” until we clean up this major problem with the
If we are going to assist the President to achieve transformation
of the VA for the 21st Century, then there is no better place to
start than ensuring full transparency in the VA formulary, and a
presumption of inclusion of all FDA approved medications. And, for
that, we need bi-partisan legislation and the strong leadership from
this Subcommittee on this issue.
Thank you for your leadership in holding this hearing on a crucial
subject, Mr. Chairman. I will be pleased to answer any questions,
and look forward to working with you and your colleagues to greatly
improve this vital service to veterans.
VIETNAM VETERANS OF AMERICA PRIVATE
September 22, 2009
The national organization Vietnam Veterans of America (VVA) is
a non-profit veterans' membership organization registered as a 501(c)
(19) with the Internal Revenue Service. VVA is also appropriately
registered with the Secretary of the Senate and the Clerk of the
House of Representatives in compliance with the Lobbying Disclosure
Act of 1995.
VVA is not currently in receipt of any federal grant or contract,
other than the routine allocation of office space and associated
resources in VA Regional Offices for outreach and direct services
through its Veterans Benefits Program (Service Representatives).
This is also true of the previous two fiscal years.
For Further Information, Contact:
Executive Director of Policy and Government Affairs
Vietnam Veterans of America
(301) 585-4000, extension 127