What is the National Formulary?

The National Formulary was launched in 1996. It is an ever-evolving list of drugs that ensures the availability of quality drug therapies for the members of group benefit plans and their families. The National Formulary answers the needs of employer group plans that cover both working and retired employees and their families, across Canada - uniformly, coast-to-coast.

How is the National Formulary best utilized?

The National Formulary is best utilized when migrating from an existing pay-direct, prescription-requiring plan. It is not meant to be a stand-alone plan, but rather the first tier of a two-tiered plan. Pairing this formulary with a second tier plan at a much higher co-pay encourages "smart shopping" by patients, while providing coverage for most medications at some level. If a member gets a medication that is not eligible on the National Formulary, it may be covered at the greater co-pay (i.e. 50 percent). The member could then work with his or her physician and our physician help line, if necessary, to obtain an alternative medication that would be covered under the National Formulary tier. This formulary does not target a handful of drugs, nor does it suggest that there is only one drug that is an alternative. It works dynamically, 24 hours a day, 7 days a week.

Why choose the National Formulary?

Drug formulary programs are emerging as a means to manage drug benefit costs. Many of our largest clients use the National Formulary and have realized savings, while their competitors are seeing an annual increase of 15 - 25 percent in drug costs each year. Research from the pharmacy profession, drug manufacturers and plan sponsors shows several key reasons for rising health care costs.

• As people age, they use more medications
• Drug therapies are increasingly used to treat more conditions
• Optimal prescribing has not been achieved
• New medications, some of which are very expensive, are being released at an increasing rate

Most governments and plan sponsors are addressing the challenge of providing quality health care on a sustainable basis. Private sector health plans are estimated to represent 28 percent of the total cost of health care and this percentage is expected to grow. What must change? Behavior. Consumers must become more responsible for their health care needs and physicians need to be more accountable for the resources they use to improve the health of their patients. Formularies are an excellent tool for progressive change. They are not new, in fact the first was operational in a London hospital in 1786. Today, most hospitals in Canada and most provinces have formularies for their social assistance plans. While generally acknowledged as successful in managing drug costs, there has been some concern that formularies may compromise quality of care in one way or another.

Many employers have been reluctant to introduce formularies until they are confident that both pharmacists and physicians are comfortable with the concept. Employees and their dependents are apprehensive of change and a supportive health care community reduces their apprehension. Our challenge is to ensure that formularies promote improved health outcomes and not just a reduction in drug costs. At the same time, an effective formulary can facilitate a positive change in behavior.

What are the objectives of the National Formulary?

• To provide a credible process for developing and maintaining a list of eligible drugs
• To encourage physicians and consumers to be more accountable for their drug therapies
• To ensure that health outcomes are not compromised

Brand name pharmaceutical companies submit their new drug information to an independent reviewing body. This team makes recommendations on whether the drug should be designated as a first, second or third line therapy, based on the evidence available at the time of submission. Their recommendations are then sent to our Formulary Management Committee, which determines whether the drug will be included in the first or second tier of the formulary, or if it is to be excluded. Similar drugs are taken into consideration when the committee determines the economic impact of placement on the first or second tier. As new studies (particularly pharmacoeconomic in nature) become available, drugs may be moved from one tier to another or removed from the formulary (with six months' notice in the case of removal and movement from the first to second tier).

How often are drugs added to the formulary?

The National Formulary is designed to allow plan sponsors a measure of control and cost containment. Each new drug is reviewed on the basis of its efficacy of treatment and cost implication. Additions of new drugs (brand names and single-source brand name drugs) are reviewed 10 times a year. Changes made by the Formulary Management Committee are communicated via e-mail to the User Group (which is made up of insurance carriers who offer these services through the Assure drug card) in a timely manner, usually every quarter. The User Group then passes this information along to its policyholders. Generics and line extensions (except for sustained release forms) of eligible brand name drugs are added on a regular basis as they come into the Canadian market.

Who maintains the formulary?

We work in tandem with a group of experts at ReVue, an independent consulting company serving private and public organizations involved in health care services. ReVue is comprised of leading experts in the field of drug therapies and their use in treating a wide range of medical conditions. The role of ReVue in the National Formulary is a medical/scientific one. It provides recommendations to us and reviews them regularly. ReVue assesses prescription drugs approved in Canada for major diseases by reviewing extensive evidence-based information available from:

• Objective and systematic reviews
• Consensus conferences
• Epidemiological data
• Published evidence and opinions
• Pharmacoeconomic studies
• Pharmacoeconomic modelling
• Opinions of experts in the field

ReVue then provides its recommendations to the Formulary Management Committee, which reviews and packages the information into the formulary.

How are drugs chosen?

The primary focus is placed on the efficacy and safety of a product, with economic considerations addressed within this perspective. The evaluation of new drugs results in the identification of a first, second and sometimes third line therapy (A, B, and C respectively) for each medical condition. In instances where a particular medication could be used for several conditions, ReVue evaluates the chemical more than once and assigns the relevant designation for each condition. Recommendations are based upon a review of the evidence (listed above) and the expert opinion of ReVue's members. In analyzing ReVue's recommendations, we begin by incorporating all drug chemicals labeled A or B for their principal medical condition. Products with a B designation are also reviewed from an economic perspective, as compared to other A and B drugs applicable to the same medical condition. If the daily therapy cost is considerably higher (30 percent or greater), and the product is not judged to be appreciably different from its alternatives, it is not included in the formulary. However, recognizing that special situations for some individual patients may require the use of these drugs, they will be payable at a reduced amount (on the second tier of a two-tiered formulary) and could be considered for a higher reimbursement according to a special authorization protocol.

What are first and second line therapies?

A first line therapy is the recognized standard first choice of treatment for the specific medical condition and patient. A second line therapy is one that is used if the first line of therapy was not successful or if the normal first line of therapy is not appropriate for that patient. In instances where neither the first or second line therapy is successful or appropriate, a physician will prescribe a third line therapy. One of the challenges in medicine is that some patients are prescribed a second or third line therapy too quickly. For example, some migraine sufferers are prescribed a very strong pain reliever (a second line therapy) right away when a simple pain reliever (first line therapy) may be more effective for the majority of patients. Another example of this occurs when a broad spectrum antibiotic is prescribed instead of one that is infection-specific. The long-term results include increased resistance to the effects of antibiotics. The National Formulary aims to reduce the number of third line therapies being inappropriately used as first line therapy, through reduced payments and the requirement of a special authorization to increase the reimbursement level. Similarly, certain products that would be first line therapies for infrequent medical conditions, but not first line for the majority of situations, are excluded from the formulary. These products will be payable at a reduced amount and may be considered for a higher reimbursement by special authorization, subject to approval.

How many drugs are covered under the National Formulary?

The National Formulary includes approximately 85 percent of the most frequently prescribed drugs. This figure changes with each review of the formulary. While drugs that are not approved for license in Canada are excluded, the formulary will occasionally include an Over-the-Counter (OTC) drug when it is the most cost-effective therapy. In these situations, a prescription will be required and the drug must be purchased through the pharmacist.

Who are the members of the independent review body, ReVue Drug Evaluation Group Inc.?

Dr. Mitchell Levine MD, M.Sc., FRCPC
Dr. Levine is the Director of the Centre for Evaluation of Medicines, St. Joseph's Hospital, Hamilton and is Associate Professor in the Department of Epidemiology and Biostatistics and the Department of Medicine at McMaster University in Hamilton.

Dr. Jacques Le Lorier
Dr. Le Lorier is Chief, Pharmacoepidemiology and pharmacoeconomy research unit Research Centre, Centre hospitalier de l'Université de Montréal, Campus Hôtel-Dieu. He is also a Professor in the Departments of Medicine and Pharmacology, Faculté de Médecine, Université of Montréal.

Other members of the team include:

Wendy Gordon
Wendy Gordon received a Baccalaureate of Arts (Chemistry) from Queens University, a Baccalaureate of Science and a Doctorate of Pharmacy from the University of British Columbia. She is a member of the Canadian Cardiovascular Society, the College of Pharmacists of British Columbia and the Canadian Society of Hospital Pharmacists. For the past 13 years Dr. Gordon has been a clinical specialist in cardiology at Royal Columbian Hospital in New Westminster B.C. She is a Clinical Instructor in both the UBC Doctor of Pharmacy program as well as the University of Toronto Distance Doctor of Pharmacy Program. Dr. Gordon has a considerable body of research and publication work to her credit including authorship of “The pharmacists guide to cardiology: Heart failure, hypertension and acute coronary syndrome”.

Sumeet Singh
Sumeet Singh completed his Bachelor of Science in Pharmacy from the University of Toronto in 2000, and his Master of Science in Health Research Methodology from McMaster University in 2003. He is currently Acting Manager, Research at the Canadian Agency for Drugs and Technologies in Health (CADTH), where he has worked for the past five years. He also has 10 years of experience as a community pharmacist.

Nancy Parsons
Nancy Parson has enjoyed over 20 years of pharmaceutical and biopharmaceutical experience. She secured her M.Sc. in the field of Developmental Biology and following her degree conducted clinical research in endocrinology before joining the pharmaceutical industry with Bristol Labs. Nancy has extensive experience in the biotechnology industry with both Genentech Canada and Amgen Canada where her responsibilities included clinical trial work, product launches, pharmacoeconomic analyses, reimbursement and Sales and Product Management. Nancy managed all business functions, as General Manager, for the Canadian operations of the Liposome Company, Elan Pharmaceuticals, Enzon Pharmaceuticals and Sopherion Therapeutics Canada, Inc.

Andrew Wyllie
Andrew Wyllie is a drug information pharmacist at Mount Sinai Hospital in Toronto. He holds a bachelor and a doctorate degree in Pharmacy from University of Toronto, and completed a hospital pharmacy residency at London Health Sciences Centre. He precepts pharmacy residents and PharmD students in drug information and critical appraisal. He enjoys debates with students and colleagues about how to interpret and apply studies to clinical practice . Andrew is the secretary for the Pharmacotherapy and Safe Medication Practices committee which oversees the safe and effective use of medicines at Mount Sinai.

Marie Pineau
Marie Pineau holds a Master’s Degree in Science with a major in Hospital Pharmacy, and a Bachelor’s Degree in Pharmacy, from the University of Montreal. She is also a fellow of the American and Canadian Hospital Pharmacists Associations. She was Director of Pharmacy at The Montreal General Hospital for eleven years. Since 1996, she has held director level positions related to government affairs within the pharmaceutical industry at Berlex Canada Inc. and Bristol-Myers Squibb. She was mostly responsible for leading the pricing/reimbursement interface with Federal agencies such as CADTH especially CDR and PMPRB as well as provincial governments and third party payers. She is now a consultant. During her career, Mrs. Pineau has been involved in many pharmacy associations and was board member of various governments’ councils: “Conseil consultatif de pharmacologie”, “Conseil Médical” and “Senior Management Review Committee –Drugs Directorate, Health Canada”. She also served as Vice-President of the “Ordre des Pharmaciens du Québec” and has recently been reappointed as a member of the Board. Marie Pineau has received numerous awards recognizing her achievements in the profession.

Members of the TELUS Health Solutions Formulary Management Committee are*:
Suzanne Easo, B.Sc.Phm., R.Ph. - Manager, Pharmacy Services
Katherine Ho, B.Sc.Phm., M.Sc.Phm., R.Ph. - Pharmacy Services
Neveen Abdelsayed, B.Sc.Phm., R.Ph., CDE. - Pharmacy Services
Jason Kennedy, B.Sc. Phm. - Account Executive, Pharmacist

_{* Detailed biographies are available on request.}