Christiana Care Implements Formulary Decision Process Focused on Value

The new process takes into account the efficacy, risk, cost, and societal benefit of a given specialty drug in determining whether it should be added to the hospital’s formulary.

As costs for specialty medications continue to rise, hospitals and providers are often forced to balance the value of a given drug to patients against its financial impact on the health system. Taking into account these competing factors, Christiana Care Health System’s Value Institute has designed a new value-based process for deciding which specialty medications will be added to the hospital’s formulary. The details of the new model were published online on May 17, 2013, in Value in Health.

Christiana Care’s traditional method for evaluating specialty drugs focused on efficacy, safety, and cost. A clinical pharmacist would compile information on these 3 areas and make a recommendation as to whether the drug should be added to the formulary. After reviewing these materials, a physician would make a recommendation as well. Finally, all of the gathered information would be reviewed by the Pharmacy and Therapeutics Committee, composed of 25 members representing the hospital’s various departments, which would decide whether to add the drug to the formulary.

The hospital began to question this process in 2010, when many newer and more expensive specialty drugs became available, and developed a new method that assessed the value of the drug compared with its price in the hopes of eliminating high-cost drugs that offer little benefit to patients.

The new process assigns numerical scores to the efficacy, risk, cost, and societal benefit of a given drug. The drug’s scores are then compared to those of an equivalent medication or therapy used to treat the same condition. These comparative scores serve as guidelines for the Pharmacy and Therapeutics Committee to make a final decision on whether the drug will be added to the formulary.

The process gives the most weight to a drug’s efficacy, which is determined based on previous studies’ findings on tolerability, level of evidence for observed outcomes, and duration of those outcomes. Outcomes that either prevented or cured a disease are the most valuable, and evidence for the outcomes is scored as strong, moderate, or weak depending on the type of the study.

A risk assessment checklist is used to categorize each drug as low, moderate, or high risk. Cost is evaluated by comparing the projected number of patients eligible to use the drug per year with payer information to determine the overall financial impact on the health system.

The evaluation of societal benefit is the most unusual and controversial portion of the process. Input from a panel of community members was included in the process in order to balance community needs against financial considerations in the final decision. In evaluating the societal benefits of drugs, the community panel is most interested in a drug’s ability to improve patients’ quality of life. The panel gives each drug a score of low, moderate, or high value.

Once a drug has been scored in each area, the Pharmacy and Therapeutics Committee reviews the information and decides whether or not a drug will be added to the formulary. The hospital has assessed 12 drugs to date using the new system, choosing to add 7 drugs and to reject 4. According to the study, a final drug was “withdrawn from consideration when the physician group that requested its addition to the health system formulary was unable to come to consensus on the patient population for which it would be prescribed.”

Although it has not received any patient complaints, Christiana Care hopes to allow patients a greater say in future formulary decisions.