HD4 - An Examination of Pharmacy Benefit Manager Practices and Therapeutic Interchange for Citizens in the Commonwealth of Virginia


Executive Summary:
The studies included in the interim (January 11, 1999) and final reports were commissioned by the Virginia Department of Medical Assistance (DMAS) as authorized by the Commonwealth's General Assembly per HJR 574 (1997). HJR 574 authorized DMAS to: (1) examine practices of pharmacy benefit manager firms (PBMs) on the Commonwealth's citizens, and (2) determine the affect of such practices on the Commonwealth's citizens and the overall healthcare market. In light of the interest of the Special Task Force Studying the Practice of Therapeutic Interchange (HJR 630 (1997)), the Department also examined in depth the PBM practice of therapeutic interchange. The Department commissioned two studies by the VCU School of Pharmacy and two studies by the George Mason University Mercatus Center. The VCU Literature Review (interim report) outlined the purpose and history of PBMs and identified emerging issues in the management of pharmacy benefits. This report concluded that there was little reliable research into the practices of pharmacy benefit managers. As a result, the Department commissioned three scientific studies of PBM practices in the Commonwealth with specific emphasis on the practice of therapeutic interchange. The first study, Mercatus PBM Study (interim report), estimates the annual incidence of therapeutic interchange in the Commonwealth of Virginia by analyzing PBM pharmacy claims data. The Mercatus PBM Study also identifies health insurers in Virginia and how they are organized to manage their pharmacy benefit. The VCU Citizen Survey (final report) examines the impact of pharmacy benefit management practices through a survey of citizens. Satisfaction with prescription drug coverage was tested for correlation with therapeutic interchange, other PBM practices, general prescription experience and demographic factors to learn what factors affect satisfaction with prescription drug coverage. Demographic factors and prescription experiences that increase the risk of a therapeutic interchange were also analyzed. The Mercatus Physician/Pharmacist Survey (final report) estimates the incidence of therapeutic interchange, the reasons that therapeutic interchange is initiated, the annual incidence of patient complaints and the perceptions of physicians and pharmacists on whether therapeutic interchange improves or worsens clinical outcomes, as well as other related indicators. The study also evaluates the consistency of therapeutic interchange estimates between the different studies. The question and answers that follow summarize the most important findings from the studies.