(a) General--
(1) Statutory authority.
Title 10, U.S.
Code, Section 1074g requires that the Department of Defense establish
an effective, efficient, integrated pharmacy benefits program for
the Military Health System. This law is independent of a number
of sections of Title 10 and other laws that affect the benefits,
rules, and procedures of TRICARE, resulting in changes to the rules
otherwise applicable to TRICARE Prime, Standard, and Extra.
(2) Pharmacy benefits
program.
(i) Applicability.
The pharmacy
benefits program, which includes the uniform formulary and its associated
tiered co-payment structure, is applicable to all of the uniformed services.
Geographically, except as specifically provided in paragraph (a)(2)(ii)
of this section, this program is applicable to all 50 states and
the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
In addition, if authorized by the Assistant Secretary of Defense
(Health Affairs) (ASD(HA)), the TRICARE pharmacy benefits program
may be implemented in areas outside the 50 states and the District
of Columbia, Guam, Puerto Rico, and the Virgin Islands. In such
case, the ASD(HA) may also authorize modifications to the pharmacy
benefits program rules and procedures as may be appropriate to the
area involved.
(ii) Applicability
exception.
The
pharmaceutical benefit under the TRICARE smoking cessation program
under Sec. 199.4(e)(30) is available to TRICARE beneficiaries who
are not entitled to Medicare benefits authorized under Title XVIII
of the Social Security Act. Except as noted in Sec. 199.4(e)(30),
the smoking cessation program, including the pharmaceutical benefit,
is not applicable or available to beneficiaries who reside overseas,
including the U. S. territories of Guam, Puerto Rico, and the Virgin Islands,
except that under the authority of Sec. 199.17 active duty service
members and active duty dependents enrolled in TRICARE Prime residing
overseas, including the U. S. territories of Guam, Puerto Rico,
and the Virgin Islands, shall have access to smoking cessation pharmaceuticals
through either an MTF or the TMOP program where available.
(3) Uniform formulary.
The pharmacy
benefits program features a uniform formulary of pharmaceutical
agents as defined in Sec. 199.2.
(i) The uniform formulary
will assure the availability of pharmaceutical agents in the complete
range of therapeutic classes authorized as basic program benefits.
(ii) As
required by 10 U.S.C. 1074g(a)(2) and implemented under the procedures
established by paragraphs (e) and (f) of this section, pharmaceutical
agents in each therapeutic class are selected for inclusion on the
uniform formulary based upon the relative clinical effectiveness
and cost effectiveness of the agents in such class. If a pharmaceutical
agent in a therapeutic class is determined by the Department of
Defense Pharmacy and Therapeutics Committee not to have a significant,
clinically meaningful therapeutic advantage in terms of safety,
effectiveness, or clinical outcome over other pharmaceutical agents
included on the uniform formulary, the Committee may recommend it
be classified as a non-formulary agent. In addition, if the evaluation
by the Pharmacy and Therapeutics Committee concludes that a pharmaceutical
agent in a therapeutic class is not cost effective relative to other
pharmaceutical agents in that therapeutic class, considering costs,
safety, effectiveness, and clinical outcomes, the Committee may
recommend it be classified as a non-formulary agent.
(iii) Pharmaceutical
agents which are used exclusively in medical treatments or procedures
that are expressly excluded from the TRICARE benefit by statute
or regulation will not be considered for inclusion on the uniform
formulary. Excluded pharmaceutical agents shall not be available
as non-formulary agents, nor will they be cost-shared under the
TRICARE pharmacy benefits program.
(b) Definitions.
For most definitions
applicable to the provisions of this section, refer to Sec. 199.2. The
following definitions apply only to this section:
(1) Clinically necessary.
Also referred
to as clinical necessity. Sufficient evidence submitted by a beneficiary
or provider on behalf of the beneficiary that establishes that one
or more of the following conditions exist: The use of formulary
pharmaceutical agents is contraindicated; the patient experiences
significant adverse effects from formulary pharmaceutical agents
in the therapeutic class, or is likely to experience significant
adverse effects from formulary pharmaceutical agents in the therapeutic
class; formulary pharmaceutical agents result in therapeutic failure,
or the formulary pharmaceutical agent is likely to result in therapeutic
failure; the patient previously responded to a non-formulary pharmaceutical
agent and changing to a formulary pharmaceutical agent would incur an
unacceptable clinical risk; or there is no alternative pharmaceutical
agent on the formulary.
(2) Therapeutic
class.
A
group of pharmaceutical agents that are similar in chemical structure, pharmacological
effect, and/or clinical use.
(3) Over-the-counter drug.
A drug that is not subject
to section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 353(b)(1)).
(c) Department of Defense
Pharmacy and Therapeutics Committee--
(1) Purpose.
The Department of Defense Pharmacy and Therapeutics
Committee is established by 10 U.S.C. 1074g to assure that the selection
of pharmaceutical agents for the uniform formulary is based on broadly representative
professional expertise concerning relative clinical and cost effectiveness
of pharmaceutical agents and accomplishes an effective, efficient,
integrated pharmacy benefits program.
(2) Composition.
As required
by 10 U.S.C. 1074g(b), the committee includes representatives of pharmacies
of the uniformed services facilities and representatives of providers
in facilities of the uniformed services. Committee members will
have expertise in treating the medical needs of the populations
served through such entities and in the range of pharmaceutical
and biological medicines available for treating such populations.
(3) Executive Council.
The Pharmacy
and Therapeutics Committee may have an Executive Council, composed
of those voting and non-voting members of the Committee who are
military or civilian employees of the Department of Defense. The
function of the Executive Council is to review and analyze issues
relating to the operation of the uniform formulary, including issues
of an inherently governmental nature, procurement sensitive information,
and matters affecting military readiness. The Executive Council
presents information to the Pharmacy and Therapeutics Committee,
but is not authorized to act for the Committee.
(d) Uniform Formulary
Beneficiary Advisory Panel.
As required by 10 U.S.C. 1074g(c), a Uniform Formulary
Beneficiary Advisory Panel reviews and comments on the development
of the uniform formulary. The Panel includes members that represent
non-governmental organizations and associations that represent the
views and interests of a large number of eligible covered beneficiaries, contractors
responsible for the TRICARE retail pharmacy program, contractors
responsible for the TRICARE mail-order pharmacy program, and TRICARE
network providers. The panel will meet after each Pharmacy and Therapeutics
Committee quarterly meeting. The Panel’s comments will be submitted
to the Director, TRICARE Management Activity. The Director will
consider the comments before implementing the uniform formulary
or any recommendations for change made by the Pharmacy and Therapeutics
Committee. The Panel will function in accordance with the Federated
Advisory Committee Act (5 U.S.C. App. 2).
(e) Determinations
regarding relative clinical and cost effectiveness for the selection
of pharmaceutical agents for the uniform formulary--
(1) Clinical effectiveness.
(i) It
is presumed that pharmaceutical agents in a therapeutic class are
clinically effective and should be included on the uniform formulary
unless the Pharmacy and Therapeutics Committee finds by a majority
vote that a pharmaceutical agent does not have a significant, clinically
meaningful therapeutic advantage in terms of safety, effectiveness,
or clinical outcome over the other pharmaceutical agents included
on the uniform formulary in that therapeutic class. This determination
is based on the collective professional judgment of the DoD Pharmacy
and Therapeutics Committee and consideration of pertinent information
from a variety of sources determined by the Committee to be relevant
and reliable. The DoD Pharmacy and Therapeutics Committee has discretion
based on its collective professional judgment in determining what
sources should be reviewed or relied upon in evaluating the clinical effectiveness
of a pharmaceutical agent in a therapeutic class.
(ii) Sources
of information may include but are not limited to:
(A) Medical
and pharmaceutical textbooks and reference books;
(B) Clinical
literature;
(C) U.S. Food and Drug
Administration determinations and information;
(D) Information
from pharmaceutical companies;
(E) Clinical practice
guidelines, and
(F) Expert opinion.
(iii) The
DoD Pharmacy and Therapeutics Committee will evaluate the relative
clinical effectiveness of pharmaceutical agents within a therapeutic
class by considering information about their safety, effectiveness,
and clinical outcome.
(iv) Information considered
by the Committee may include but is not limited to:
(A) U.S.
Food and Drug Administration approved and other studied indications;
(B) Pharmacology;
(C) Pharmacokinetics;
(D) Contraindications;
(E) Warnings/precautions;
(F) Incidence
and severity of adverse effects;
(G) Drug to drug, drug
to food, and drug to disease interactions;
(H) Availability,
dosing, and method of administration;
(I) Epidemiology
and relevant risk factors for diseases/conditions in which the pharmaceutical agents
are used;
(J) Concomitant therapies;
(K) Results
of safety and efficacy studies;
(L) Results of effectiveness/clinical
outcomes studies, and
(M) Results of meta-analyses.
(2) Cost effectiveness.
(i) In
considering the relative cost effectiveness of pharmaceutical agents
in a therapeutic class, the DoD Pharmacy and Therapeutics Committee
shall evaluate the costs of the agents in relation to the safety,
effectiveness, and clinical outcomes of the other agents in the
class.
(ii) Information considered by the Committee concerning
the relative cost effectiveness of pharmaceutical agents may include
but is not limited to:
(A) Cost of the pharmaceutical
agent to the Government;
(B) Impact on overall
medical resource utilization and costs;
(C) Cost-efficacy
studies;
(D) Cost-effectiveness
studies;
(E) Cross-sectional
or retrospective economic evaluations;
(F) Pharmacoeconomic
models;
(G) Patent expiration dates;
(H) Clinical
practice guideline recommendations, and
(I) Existence
of existing or proposed blanket purchase agreements, incentive price
agreements, or contracts.
(3) Special rules for best
clinical effectiveness. (i) Under
the authority of 10 U.S.C. 1074g(a)(10), the Pharmacy and Therapeutics
Committee may recommend and the Director may, after considering
the comments and recommendations of the Beneficiary Advisory Panel,
approve special uniform formulary actions to encourage use of pharmaceutical
agents that provide the best clinical effectiveness to covered beneficiaries
and DoD, including consideration of better care, healthier people,
and smarter spending. Such special actions may operate as exceptions
to the normal rules and procedures under 10 U.S.C. 1074g(a)(2),
(5) and (6) and the related provisions of this section.
(ii) Actions
under paragraph (e)(3)(i) of this section may include a complete
or partial exclusion from the pharmacy benefits program of any pharmaceutical
agent the Director determines provides very little or no clinical
effectiveness relative to similar agents to covered beneficiaries
and DoD. A partial exclusion under this paragraph may take the form
(as one example) of a limitation on the clinical conditions, diagnoses,
or indications for which the pharmaceutical agent may be prescribed.
A partial exclusion may be implemented through any means recommended
by the Pharmacy and Therapeutics Committee, including but not limited
to preauthorization under paragraph (k) of this section. In the case
of a partial exclusion, a pharmaceutical agent may be available
on the non-formulary tier of the uniform formulary for limited purposes
and for other purposes be excluded.
(iii) Actions
under paragraph (e)(3)(i) of this section may also include giving
preferential status to any non-generic pharmaceutical agent of the
uniform formulary by treating it for purposes of cost-sharing as
a generic product.
(f) Evaluation of pharmaceutical
agents for determinations regarding inclusion on the uniform formulary.
The DoD Pharmacy
and Therapeutics Committee will periodically evaluate or re-evaluate
individual pharmaceutical agents and therapeutic classes of pharmaceutical
agents for determinations regarding inclusion or continuation on
the uniform formulary. Such evaluation or re-evaluation may be prompted
by a variety of circumstances including, but not limited to:
(1) Approval
of a new pharmaceutical agent by the U.S. Food and Drug Administration;
(2) Approval
of a new indication for an existing pharmaceutical agent;
(3) Changes
in the clinical use of existing pharmaceutical agents;
(4) New
information concerning the safety, effectiveness or clinical outcomes
of existing pharmaceutical agents;
(5) Price changes;
(6) Shifts
in market share;
(7) Scheduled review
of a therapeutic class; and
(8) Requests from Pharmacy
and Therapeutics Committee members, military treatment facilities,
or other Military Health System officials.
(g) Administrative
procedures for establishing and maintaining the uniform formulary--
(1) Pharmacy and
Therapeutics Committee determinations.
Determinations of the Pharmacy
and Therapeutics Committee are by majority vote and recorded in
minutes of Committee meetings. The minutes set forth the determinations
of the committee regarding the pharmaceutical agents selected for
inclusion in the uniform formulary and summarize the reasons for
those determinations. For any pharmaceutical agent (including maintenance
medications) for which a recommendation is made that the status
of the agent be changed from the formulary tier to the non-formulary
tier of the uniform formulary, or that the agent requires a pre-authorization,
the Committee shall also make a recommendation as to effective date
of such change that will not be longer than 180 days from the final
decision date but may be less. The minutes will include a record
of the number of members voting for and against the Committee’s
action.
(2) Beneficiary Advisory Panel.
Comments and
recommendations of the Beneficiary Advisory Panel are recorded in
minutes of Panel meetings. The minutes set forth the comments and
recommendations of the Panel and summarize the reasons for those
comments and recommendations. The minutes will include a record
of the number of members voting for or against the Panel’s comments
and recommendations.
(3) Uniform formulary final decisions.
The Director
of the TRICARE Management Activity makes the final DoD decisions
regarding the uniform formulary. Those decisions are based on the
Director’s review of the final determinations of the Pharmacy and
Therapeutics Committee and the comments and recommendations of the
Beneficiary Advisory Panel. No pharmaceutical agent may be designated as
non-formulary on the uniform formulary unless it is preceded by
such recommendation by the Pharmacy and Therapeutics Committee.
The decisions of the Director of the TRICARE Management Activity
are in writing and establish the effective date(s) of the uniform
formulary actions.
(4) Transition to the Uniform Formulary.
Beginning in
Fiscal Year 2005, under an updated charter for the DoD P&T Committee,
the committee shall meet at least quarterly to review therapeutic
classes of pharmaceutical agents and make recommendations concerning
which pharmaceutical agents should be on the Uniform Formulary,
the Basic Care Formulary (BCF), and Extended Core Formulary (ECF).
The P&T Committee will review the classes in a methodical, but
expeditious manner. During the transition period from the previous
methodology of formulary management involving only the MTFs and
the TMOP Program, previous decisions by the predecessor DoD P&T
Committee concerning MTF and Mail Order Pharmacy Program formularies
shall continue in effect. As therapeutic classes are reviewed under
the new formulary management process, the processes established
by this section shall apply.
(5) Administrative procedure for newly approved
drugs.
In
the case of a newly approved innovator drug, other than a generic
drug, the innovator drug will, not later than 120 days after the
date of approval by the Food and Drug Administration, be added to
the uniform formulary unless prior to that date the P&T Committee
has recommended that the agent be listed as a non-formulary drug.
If the Director, DHA subsequently approves that recommendation,
the drug will be so listed. If the Director, DHA disapproves the
recommendation to list the drug as non-formulary Third Tier, the
drug will be then classified per the Director’s decision. If, prior
to the expiration of 120 days, the P&T Committee recommends
that the agent be added to the uniform formulary and the recommendation
is approved by the Director, DHA, that will be done as soon as feasible.
Pending action under this paragraph (g)(5), the newly approved pharmaceutical
agent will be considered to be in a classification pending status and
will be available to beneficiaries under Third Tier terms applicable
to all other non-formulary agents.
(h) Obtaining pharmacy
services under the retail network pharmacy benefits program.
(1) Points of service.
There are four
outpatient pharmacy points of service:
(i) Military
Treatment Facilities (MTFs);
(ii) Retail network
pharmacies: Those are non-MTF pharmacies that are a part of the
network established for TRICARE retail pharmacy services;
(iii) Retail
non-network pharmacies: Those are non-MTF pharmacies that are not
part of the network established for TRICARE retail pharmacy services,
and
(iv) the TRICARE Mail Order Pharmacy (TMOP).
(2) Availability
of formulary pharmaceutical agents.
(i) General.
Subject to paragraphs (h)(2)(ii) and (h)(2)(iii)
of this section, formulary pharmaceutical agents are available under
the Pharmacy Benefits Program from all points of service identified
in paragraph (h)(1) of this section.
(ii) Availability
of formulary pharmaceutical agents at military treatment facilities
(MTF).
Pharmaceutical
agents included on the uniform formulary are available through facilities
of uniformed services, consistent with the scope of health care
services offered in such facilities and additional determinations
by the P&T Committee of the relative clinical effectiveness
and cost effectiveness, based on costs to the Program associated
with providing the agents to beneficiaries. The BCF is a subset
of the uniform formulary and is a mandatory component of formularies
at all full-service MTF pharmacies. The BCF contains the minimum
set of pharmaceutical agents that each full-service MTF pharmacy
must have on its formulary to support the primary care scope of
practice for Primary Care Manager enrollment sites. Limited-service
MTF pharmacies (e.g., specialty pharmacies within an MTF or pharmacies
servicing only active duty military members) are not required to
include the entire BCF on their formularies, but may limit their
formularies to those BCF agents appropriate to the needs of the
patients they serve. An ECF may list preferred agents in drug classes
other than those covered by the BCF. Among BCF and ECF agents, individual
MTF formularies are determined by local P&T Committees based
on the scope of health care services provided at the respective
MTFs. All pharmaceutical agents on the local formulary of full-service
MTF pharmacies must be available to all categories of beneficiaries.
(iii) Pharmaceutical
agents prescribed for smoking cessation are not available for coverage
when obtained through a retail pharmacy. This includes network and
non-network retail pharmacies.
(3) Availability of non-formulary pharmaceutical
agents.--
(i) General.
Non-formulary
pharmaceutical agents are generally not available in military treatment
facilities or in the retail point of service. They are available
in the mail order program.
(ii) Availability
of non-formulary pharmaceutical agents at military treatment facilities.
Even when particular
non-formulary agents are not generally available at military treatment
facilities, they will be made available to eligible covered beneficiaries
through the non-formulary special approval process as noted in this
paragraph (h)(3)(ii) when there is a valid medical necessity for
use of the non-formulary pharmaceutical agent.
(iii) Availability
of clinically appropriate non-formulary pharmaceutical agents to
members of the Uniformed Services.
The pharmacy benefits program
is required to assure the availability of clinically appropriate
pharmaceutical agents to members of the uniformed services, including,
where appropriate, agents not included on the uniform formulary.
Clinically appropriate pharmaceutical agents will be made available
to members of the Uniformed Services, including, where medical necessity
has been validated, agents not included on the uniform formulary.
MTFs shall establish procedures to evaluate the clinical necessity
of prescriptions written for members of the uniformed services for
pharmaceutical agents not included on the uniform formulary. If
it is determined that the prescription is clinically necessary,
the MTF will provide the pharmaceutical agent to the member.
(iv) Availability
of clinically appropriate pharmaceutical agents to other eligible
beneficiaries at retail pharmacies or the TMOP.
Eligible beneficiaries will
receive non-formulary pharmaceutical agents at the formulary cost-share
when medical necessity has been established by the beneficiary and/or
his/her provider. The peer review provisions of Sec. 199.15 shall
apply to the clinical necessity pre-authorization determinations.
TRICARE may require that the time for review be expedited under
the pharmacy benefits program.
(4) Availability
of vaccines/immunizations.
A retail network pharmacy may be an authorized
provider under the Pharmacy Benefits Program when functioning within
the scope of its state laws to provide authorized vaccines/immunizations
to an eligible beneficiary. The Pharmacy Benefits Program will cover
the vaccine and its administration by the retail network pharmacy,
including administration by pharmacists who meet the applicable
requirements of state law to administer the vaccine. A TRICARE authorized
vaccine/immunization includes only vaccines/immunizations authorized
as preventive care under the basic program benefits of Sec. 199.4
of this part, as well as such care authorized for Prime enrollees
under the uniform HMO benefit of Sec. 199.18. For Prime enrollees
under the uniform HMO benefit, a referral is not required under
paragraph (n)(2) of Sec. 199.18 for preventive care vaccines/immunizations
received from a retail network pharmacy that is a TRICARE authorized
provider. Any additional policies, instructions, procedures, and
guidelines appropriate for implementation of this benefit may be
issued by the TMA Director.
(5) Availability of selected over-the-counter
(OTC) drugs under the pharmacy benefits program.
Although the pharmacy benefits
program generally covers only prescription drugs, in some cases over-the-counter
drugs may be covered and may be placed on the uniform formulary.
(i) An
OTC drug may be included on the uniform formulary upon the recommendation
of the Pharmacy and Therapeutics Committee and approval of the Director,
DHA, based on a finding that it is cost-effective and clinically
effective, as compared with other drugs in the same therapeutic
class of pharmaceutical agents. Clinical need is judged by the criteria
found in paragraph (e)(1)(i) and (ii) of this section. Cost effectiveness
is determined based on criteria found in paragraph (e)(2) of this
section.
(ii) OTC drugs placed
on the uniform formulary, in general, will be treated the same as
generic drugs on the uniform formulary for purposes of availability
in MTF pharmacies, retail pharmacies, and the mail order pharmacy
program and other requirements. However, upon the recommendation
of the Pharmacy and Therapeutics Committee and approval of the Director,
DHA, the requirement for a prescription may be waived for a particular
OTC drug for certain emergency care treatment situations. In addition,
a special copayment may be established under paragraph (i)(2)(xii)
of this section for OTC drugs specifically used in certain emergency
care treatment situations.
(i)
Cost-sharing
requirements under the pharmacy benefits program--
(1) General.
Under 10 U.S.C.
1074g(a)(6), cost-sharing requirements are established in this section
for the pharmacy benefits program independent of those established
under other provisions of this Part. Cost-shares under this section
partially defray government costs of administering the pharmacy
benefits program when collected by the government for prescriptions
dispensed through the retail network pharmacies or the TRICARE Mail
Order Pharmacy. The higher cost-share paid for prescriptions dispensed
by a non-network retail pharmacy is established to encourage the
use of the most economical venue to the government. Cost-sharing
requirements are based on the classification of a pharmaceutical
agent as generic, formulary, or non-formulary, in conjunction with
the point of service from which the agent is acquired.
(2) Cost-sharing
amounts.
Active
duty members of the uniformed services do not pay cost-shares or annual
deductibles. For other categories of beneficiaries, after applicable
annual deductibles are met, cost-sharing amounts prior to October
1, 2016, are set forth in this paragraph (i)(2):
(i) For
pharmaceutical agents obtained from a military treatment facility,
there is no cost-sharing or annual deductible.
(ii) For
pharmaceutical agents obtained from a retail network pharmacy, the
cost share will be as provided in 10 U.S.C. 1074g(a)(6), except
that there is a $0 cost-share for vaccines/immunizations authorized
as preventive care for eligible beneficiaries.
(iii) For
formulary and generic pharmaceutical agents obtained from a retail
non-network pharmacy, except as provided in paragraph (i)(2)(vi)
of this section, there is a 20 percent or $20.00 cost-share (whichever
is greater) per prescription for up to a 30-day supply of the pharmaceutical
agent.
(iv) For pharmaceutical agents obtained
under the TRICARE mail order program, the cost share will be as
provided in 10 U.S.C. 1074g(a)(6), except that there is a $0 cost-share
for smoking cessation pharmaceutical agents covered under the smoking
cessation program.
(v) [Reserved]
(vi) For
TRICARE Prime beneficiaries there is no annual deductible applicable
for pharmaceutical agents obtained from retail network pharmacies
or the TRICARE mail-order program. However, for TRICARE Prime beneficiaries
who obtain formulary or generic pharmaceutical agents from retail nonnetwork
pharmacies, an enrollment year deductible of $300 per person and
$600 per family must be met after which there is a beneficiary cost-share
of 50 percent per prescription for up to a 30-day supply of the
pharmaceutical agent.
(vii) For TRICARE Select
beneficiaries the annual deductible which must be met before the
cost-sharing amounts for pharmaceutical agents in paragraph (i)(2)
of this section are applicable is as provided for each category
of TRICARE Select enrollee in Sec. 199.17(l)(2).
(viii) For
TRICARE beneficiaries not otherwise qualified to enroll in TRICARE
Prime or Select, the annual deductible which must be met before
the cost-sharing amounts for pharmaceutical agents in paragraph
(i)(2) of this section are applicable is as provided in Sec. 199.4(f).
(ix) The
TRICARE catastrophic cap limits apply to pharmacy benefits program
cost-sharing.
(x)
For
any year after 2027, the cost-sharing amounts under this paragraph
shall be equal to the cost-sharing amounts for the previous year
adjusted by an amount, if any, determined by the Director to reflect
changes in the costs of pharmaceutical agents and prescription dispensing,
rounded to the nearest dollar. These cost changes, if any, will
consider costs under the TRICARE pharmacy benefits program calculated
separately for each of the following categories based on prescriptions
filled in the most recent period for which TRICARE cost data are
available, updated to the current year, if necessary, by appropriate
industry data:(A) Generic drugs in the
retail point of service;
(B) Formulary
drugs in the retail point of service;
(C) Generic
drugs in the mail order point of service;
(D) Formulary
drugs in the mail order point of service;
(E) Non-formulary
drugs.
(xi) For a Medicare-eligible
beneficiary, the cost-sharing requirements may not be in excess
of the cost-sharing requirements applicable to all other beneficiaries
covered by 10 U.S.C. 1086.
(xii) Special copayment
rule for OTC drugs in the retail pharmacy network.
As a general
rule, OTC drugs placed on the uniform formulary under paragraph
(h)(5) of this section will have copayments equal to those for generic
drugs on the uniform formulary. However, upon the recommendation
of the Pharmacy and Therapeutics Committee and approval of the Director,
DHA, the copayment may be established at $0.00 for any particular
OTC drug in the retail pharmacy network.
(3) Special cost-sharing
rule when there is a clinical necessity for use of a non-formulary
pharmaceutical agent.
(i) When there is a
clinical necessity for the use of a non-formulary pharmaceutical
agent that is not otherwise excluded as a covered benefit, the pharmaceutical
agent will be provided at the same co-payment as a formulary pharmaceutical
agent can be obtained.
(ii) A clinical necessity
for use of a non-formulary pharmaceutical agent is established when
the beneficiary or their provider submits sufficient information
to show that one or more of the following conditions exist:
(A) The
use of formulary pharmaceutical agents is contraindicated;
(B) The
patient experiences significant adverse effects from formulary pharmaceutical
agents, or the provider shows that the patient is likely to experience
significant adverse effects from formulary pharmaceutical agents;
(C) Formulary
pharmaceutical agents result in therapeutic failure, or the provider
shows that the formulary pharmaceutical agent is likely to result
in therapeutic failure;
(D) The patient previously
responded to a non-formulary pharmaceutical agent and changing to
a formulary pharmaceutical agent would incur unacceptable clinical
risk; or
(E) There is no alternative
pharmaceutical agent on the formulary.
(iii) Information
to establish clinical necessity for use of a non-formulary pharmaceutical
agent should be provided to TRICARE for prescriptions submitted
to a retail network pharmacy.
(iv) Information to
establish clinical necessity for use of a non-formulary pharmaceutical
agent should be provided as part of the claims processes for non-formulary
pharmaceutical agents obtained through non-network points of service,
claims as a result of other health insurance, or any other situations
requiring the submission of a manual claim.
(v) Information
to establish clinical necessity for use of a non-formulary pharmaceutical
agent may be provided with the prescription submitted to the TMOP
contractor.
(vi) Information to
establish clinical necessity for use of a non-formulary pharmaceutical
agent may also be provided at a later date, but no later than sixty
days from the dispensing date, as an appeal to reduce the non-formulary
co-payment to the same co-payment as a formulary drug.
(vii) The
process of establishing clinical necessity will not unnecessarily
delay the dispensing of a prescription. In situations where clinical
necessity cannot be determined in a timely manner, the non-formulary
pharmaceutical agent will be dispensed at the non-formulary co-payment
and a refund provided to the beneficiary should clinical necessity
be established.
(viii) Peer review
and appeal and hearing procedures. All levels of peer review, appeals,
and grievances established by the Contractor for internal review
shall be exhausted prior to forwarding to TRICARE Management Activity
for a formal review. Procedures comparable to those established
under Secs. 199.15 and 199.10 of this part shall apply. If it is
determined that the prescription is clinically necessary, the pharmaceutical
agent will be provided to the beneficiary at the formulary cost-share.
TRICARE may require that the time periods for peer review or for
appeal and hearing be expedited under the pharmacy benefits program.
For purposes of meeting the amount in dispute requirement of Sec. 199.10(a)(7),
the relevant amount is the difference between the cost shares of
a formulary versus non-formulary drug. The amount for each of multiple
prescriptions involving the same drug to treat the same medical
condition and filled within a 12-month period may be combined to
meet the required amount in dispute.
(j) Use of generic
drugs under the pharmacy benefits program.
(1) The designation
of a drug as a generic, for the purpose of applying cost-shares
at the generic rate, will be determined through the use of standard
pharmaceutical references as part of commercial best business practices. Pharmaceutical
agents will be designated as generics when listed with an “A” rating
in the current Approved Drug Products with Therapeutic Equivalence
Evaluations (Orange Book) published by the Food and Drug Administration,
or any successor to such reference. Generics are multisource products that
must contain the same active ingredients, are of the same dosage
form, route of administration and are identical in strength or concentration.
(2) The
pharmacy benefits program generally requires mandatory substitution
of generic drugs listed with an “A” rating in the current Approved
Drug Products with Therapeutic Equivalence Evaluations (Orange Book)
published by the FDA and generic equivalents of grandfather or Drug Efficacy
Study Implementation (DESI) category drugs for brand name drugs.
In cases in which there is a clinical justification for a brand
name drug in lieu of a generic equivalent, under the standards and procedures
of paragraph (h)(3) of this section, the generic substitution policy
is waived.
(3) When a blanket
purchase agreement, incentive price agreement, Government contract,
or other circumstances results in a brand pharmaceutical agent being
the most cost effective agent for purchase by the Government, the
Pharmacy and Therapeutics Committee may also designate that the drug
be cost-shared at the generic rate.
(4) Upon the recommendation
of the Pharmacy and Therapeutics Committee, a generic drug may be classified
as non-formulary if it is less cost effective than non-generic formulary
drugs in the same drug class.
(5) The beneficiary
copayment amount for any generic drug prescription may not exceed
the total charge for that prescription.
(k) Preauthorization
of certain pharmaceutical agents.
(1) Selected pharmaceutical
agents may be subject to prior authorization or utilization review
requirements to assure medical necessity, clinical appropriateness
and/or cost effectiveness.
(2) The
Pharmacy and Therapeutics Committee will assess the need to prior
authorize a given agent by considering the relative clinical and
cost effectiveness of pharmaceutical agents within a therapeutic class.
Pharmaceutical agents that require prior authorization will be identified
by a majority vote of the Pharmacy and Therapeutics Committee. The
Pharmacy and Therapeutics Committee will establish the prior authorization
criteria for the pharmaceutical agent.
(3) Prescriptions
for pharmaceutical agents for which prior authorization criteria
are not met will not be cost-shared under the TRICARE pharmacy benefits
program.
(4) The Director, TRICARE
Management Activity, may issue policies, procedures, instructions, guidelines,
standards or criteria to implement this paragraph (k).
(l) TRICARE Senior
Pharmacy Program.
Section 711 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398,
114 Stat. 1654A-175) established the TRICARE Senior Pharmacy Program
for Medicare eligible beneficiaries effective April 1, 2001. These beneficiaries
are required to meet the eligibility criteria as prescribed in Sec.
199.3 of this part. The benefit under the TRICARE Senior Pharmacy
Program applies to prescription drugs and medicines provided on
or after April 1, 2001.
(m) Effect of other
health insurance.
The double coverage rules of section 199.8
of this part are applicable to services provided under the pharmacy
benefits program. For this purpose, the Medicare prescription drug
benefit under Medicare Part D, prescription drug benefits provided
under Medicare Part D plans are double coverage plans and such plans
will be the primary payer, to the extent described in section 199.8
of this part. Beneficiaries who elect to use these pharmacy benefits
shall provide DoD with other health insurance information.
(n) Procedures.
The Director,
TRICARE Management Activity shall establish procedures for the effective
operation of the pharmacy benefits program. Such procedures may
include restrictions of the quantity of pharmaceuticals to be included
under the benefit, encouragement of the use of generic drugs, implementation
of quality assurance and utilization management activities, and
other appropriate matters.
(o) Preemption of State
laws.
(1) Pursuant to 10 U.S.C. 1103, the Department of
Defense has determined that in the administration of 10 U.S.C. chapter
55, preemption of State and local laws relating to health insurance,
prepaid health plans, or other health care delivery or financing
methods is necessary to achieve important Federal interests, including
but not limited to the assurance of uniform national health programs
for military families and the operation of such programs at the
lowest possible cost to the Department of Defense, that have a direct
and substantial effect on the conduct of military affairs and national
security policy of the United States.
(2) Based
on the determination set forth in paragraph (o)(1) of this section,
any State or local law relating to health insurance, prepaid health
plans, or other health care delivery or financing methods is preempted
and does not apply in connection with TRICARE pharmacy contracts.
Any such law, or regulation pursuant to such law, is without any
force or effect, and State or local governments have no legal authority
to enforce them in relation to the TRICARE pharmacy contracts. However,
the Department of Defense may by contract establish legal obligations
on the part of TRICARE contractors to conform with requirements
similar or identical to requirements of State or local laws or regulations.
(3) The
preemption of State and local laws set forth in paragraph (o)(1)
of this section includes State and local laws imposing premium taxes
on health or dental insurance carriers or underwriters or other plan
managers, or similar taxes on such entities. Such laws are laws
relating to health insurance, prepaid health plans, or other health
care delivery or financing methods, within the meaning of the statutes identified
in paragraph (o)(1) of this section. Preemption, however, does not
apply to taxes, fees, or other payments on net income or profit
realized by such entities in the conduct of business relating to DoD
pharmacy services contracts, if those taxes, fees or other payments
are applicable to a broad range of business activity. For purposes
of assessing the effect of Federal preemption of State and local
taxes and fees in connection with DoD pharmacy services contracts,
interpretations shall be consistent with those applicable to the
Federal Employees Health Benefits Program under 5 U.S.C. 8909(f).
(p) General fraud,
abuse, and conflict of interest requirements under TRICARE pharmacy benefits
program.
All
fraud, abuse, and conflict of interest requirements for the basic
CHAMPUS program, as set forth in this part 199 (see applicable provisions
of Sec. 199.9 of this part) are applicable to the TRICARE pharmacy
benefits program. Some methods and procedures for implementing and enforcing
these requirements may differ from the methods and procedures followed
under the basic CHAMPUS program.
(q) Pricing standards
for retail pharmacy program--
(1) Statutory requirement.
(i) As required by
10 U.S.C. 1074g(f), with respect to any prescription filled on or
after the date of the enactment of the National Defense Authorization
Act for Fiscal Year 2008, the TRICARE retail pharmacy program shall
be treated as an element of the DoD for purposes of the procurement
of drugs by Federal agencies under 38 U.S.C. 8126 to the extent
necessary to ensure pharmaceuticals paid for by the DoD that are
provided by pharmacies under the program to eligible covered beneficiaries
under this section are subject to the pricing standards in such
section 8126.
(ii) Under paragraph
(q)(1)(i) of this section, all covered drug TRICARE retail pharmacy
network prescriptions are subject to Federal Ceiling Prices under
38 U.S.C. 8126.
(2) Manufacturer written agreement.
(i) A
written agreement by a manufacturer to honor the pricing standards
required by 10 U.S.C. 1074g(f) and referred to in paragraph (q)(1)
of this section for pharmaceuticals provided through retail network
pharmacies shall with respect to a particular covered drug be a
condition for:
(A) Inclusion of that drug on the uniform formulary
under this section; and
(B) Availability of
that drug through retail network pharmacies without preauthorization
under paragraph (k) of this section.
(ii) A
covered drug not under an agreement under paragraph (q)(2)(i) of
this section requires preauthorization under paragraph (k) of this
section to be provided through a retail network pharmacy under the
Pharmacy Benefits Program. This preauthorization requirement does
not apply to other points of service under the Pharmacy Benefits
Program.
(iii) For purposes
of this paragraph (q)(2), a covered drug is a drug that is a covered
drug under 38 U.S.C. 8126, but does not include:
(A) A
drug that is not a covered drug under 38 U.S.C. 8126;
(B) A
drug provided under a prescription that is not covered by 10 U.S.C.
1074g(f);
(C) A drug that is
not provided through a retail network pharmacy under this section;
(D) A
drug provided under a prescription which the TRICARE Pharmacy Benefits
Program is the second payer under paragraph (m) of this section;
(E) A
drug provided under a prescription and dispensed by a pharmacy under
section 340B of the Public Health Service Act; or
(F) Any
other exception for a drug, consistent with law, established by
the Director, TMA.
(iv) The requirement
of this paragraph (q)(2) may, upon the recommendation of the Pharmacy
and Therapeutics Committee, be waived by the Director, TMA if necessary
to ensure that at least one drug in the drug class is included on
the Uniform Formulary. Any such waiver, however, does not waive
the statutory requirement referred to in paragraph (q)(1) that all
covered TRICARE retail network pharmacy prescriptions are subject
to Federal Ceiling Prices under 38 U.S.C. 8126; it only waives the
exclusion from the Uniform Formulary of drugs not covered by agreements
under this paragraph (q)(2).
(3) Refund procedures.
(i) Refund procedures
to ensure that pharmaceuticals paid for by the DoD that are provided
by retail network pharmacies under the pharmacy benefits program
are subject to the pricing standards referred to in paragraph (q)(1)
of this section shall be established. Such procedures may be established
as part of the agreement referred to in paragraph (q)(2), or in
a separate agreement, or pursuant to Sec. 199.11.
(ii) The
refund procedures referred to in paragraph (q)(3)(i) of this section
shall, to the extent practicable, incorporate common industry practices
for implementing pricing agreements between manufacturers and large
pharmacy benefit plan sponsors. Such procedures shall provide the manufacturer
at least 70 days from the date of the submission of the TRICARE
pharmaceutical utilization data needed to calculate the refund before
the refund payment is due. The basis of the refund will be the difference
between the average non-federal price of the drug sold by the manufacturer
to wholesalers, as represented by the most recent annual non-Federal
average manufacturing prices (non-FAMP) (reported to the Department
of Veterans Affairs (VA)) and the corresponding FCP or, in the discretion
of the manufacturer, the difference between the FCP and direct commercial
contract sales prices specifically attributable to the reported
TRICARE paid pharmaceuticals, determined for each applicable NDC
listing. The current annual FCP and the annual non-FAMP from which
it was derived will be applicable to all prescriptions filled during
the calendar year.
(iii) A refund due
under this paragraph (q) is subject to Sec. 199.11 of this part
and will be treated as an erroneous payment under that section.
(A) A
manufacturer may under section 199.11 of this part request waiver
or compromise of a refund amount due under 10 U.S.C. 1074g(f) and
this paragraph (q).
(B) During the pendency
of any request for waiver or compromise under paragraph (q)(3)(iii)(A)
of this section, a manufacturer’s written agreement under paragraph
(q)(2) shall be deemed to exclude the matter that is the subject
of the request for waiver or compromise. In such cases the agreement,
if otherwise sufficient for the purpose of the condition referred
to in paragraph (q)(2), will continue to be sufficient for that
purpose. Further, during the pendency of any such request, the matter
that is the subject of the request shall not be considered a failure
of a manufacturer to honor a requirement or an agreement for purposes
of paragraph (q)(4).
(C) In addition to
the criteria established in Sec. 199.11, a request for waiver may
also be premised on the voluntary removal by the manufacturer in
writing of a drug from coverage in the TRICARE Pharmacy Benefit
Program.
(iv) In the case of
disputes by the manufacturer of the accuracy of TMA’s utilization
data, a refund obligation as to the amount in dispute will be deferred
pending good faith efforts to resolve the dispute in accordance
with procedures established by the Director, TMA. If the dispute
is not resolved within 60 days, the Director, TMA will issue an
initial administrative decision and provide the manufacturer with
opportunity to request reconsideration or appeal consistent with
procedures under section 199.10 of this part. When the dispute is
ultimately resolved, any refund owed relating to the amount in dispute
will be subject to an interest charge from the date payment of the
amount was initially due, consistent with section 199.11 of this
part.
(4) Remedies.
In the case
of the failure of a manufacturer of a covered drug to honor a requirement of
this paragraph (q) or to honor an agreement under this paragraph
(q), the Director, TMA, in addition to other actions referred to
in this paragraph (q), may take any other action authorized by law.
(5) Beneficiary transition
provisions.
In
cases in which a pharmaceutical is removed from the uniform formulary
or designated for preauthorization under paragraph (q)(2) of this
section, the Director, TMA may for transitional time periods determined
appropriate by the Director or for particular circumstances authorize
the continued availability of the pharmaceutical in the retail pharmacy network
or in MTF pharmacies for some or all beneficiaries as if the pharmaceutical
were still on the uniform formulary.
(r) Refills of maintenance
medications for eligible covered beneficiaries through the mail order
pharmacy program--
(1) In
general.
Consistent
with section 702 of the National Defense Authorization Act for Fiscal
Year 2015, this paragraph requires that for non-generic covered maintenance
medications, beneficiaries are generally required to obtain their
prescription through the national mail-order pharmacy program or
through military treatment facility pharmacies. For purposes of
this paragraph, eligible covered beneficiaries are those defined
under sections 1072 and 1086 of title 10, United States Code.
(2) Medications covered.
The Director,
DHA, will establish, maintain, and periodically revise and update
a list of non-generic covered maintenance medications subject to
the requirement of paragraph (r)(1) of this section. The current
list will be accessible through the TRICARE Pharmacy Program Internet
Web site and by telephone through the TRICARE Pharmacy Program Service
Center. Each medication included on the list will meet the following
requirements:
(i) It will be a medication
prescribed for a chronic, long-term condition that is taken on a
regular, recurring basis.
(ii) It will be clinically
appropriate to dispense the medication from the mail order pharmacy.
(iii) It
will be cost effective to dispense the medication from the mail
order pharmacy.
(iv) It will be available
for an initial filling of a 30-day or less supply through retail
pharmacies.
(v) It will be generally
available at military treatment facility pharmacies for initial
fill and refills.
(vi) It will be available
for refill through the national mail-order pharmacy program.
(3) Refills covered.
For purposes
of the program under paragraph (r)(1) of this section, a refill
is:
(i) A subsequent filling of an original prescription
under the same prescription number or other authorization as the
original prescription; or
(ii) A new original
prescription issued at or near the end date of an earlier prescription
for the same medication for the same patient.
(4) Waiver of requirement.
A waiver of
the general requirement to obtain maintenance medication prescription
refills from the mail order pharmacy or military treatment facility
pharmacy will be granted in the following circumstances:
(i) There
is a blanket waiver for prescription medications that are for acute
care needs.
(ii) There is a blanket
waiver for prescriptions covered by other health insurance.
(iii) There
is a case-by-case waiver to permit prescription maintenance medication
refills at a retail pharmacy when necessary due to personal need
or hardship, emergency, or other special circumstance. This waiver
is obtained through an administrative override request to the TRICARE pharmacy
benefits manager under procedures established by the Director, DHA.
(5) Procedures.
Under the program
established by paragraph (r)(1) of this section, the Director, DHA will
establish procedures for the effective operation of the program.
Among these procedures are the following:
(i) The
Department will implement the program by utilizing best commercial
practices to the extent practicable.
(ii) An effective communication
plan that includes efforts to educate beneficiaries in order to optimize
participation and satisfaction will be implemented.
(iii) Beneficiaries
with active retail prescriptions for a medication on the maintenance
medication list will be notified that their medication is included
under the program. Beneficiaries will be advised that they may receive
two 30 day fill at retail while they transition their prescription
to the mail order program.
(iv) Requests for a
third fill at retail will result in 100% patient cost shares and
will be blocked from any TRICARE payments and the beneficiary advised
to call the pharmacy benefits manager (PBM) for assistance.
(v) The
PBM will provide a toll free number to assist beneficiaries in transferring
their prescriptions from retail to the mail order program. With
the beneficiary's permission, the PBM will contact the physician
or other health care provider who prescribed the medication to assist
in transferring the prescription to the mail order program.
(vi) In
any case in which a beneficiary required under paragraph (r) of
this section to obtain a maintenance medication prescription refill
from national mail order pharmacy program and attempts instead to
refill such medications at a retail pharmacy, the PBM will also
maintain the toll free number to assist the beneficiary. This assistance
may include information on how to request a waiver, consistent with
paragraph (r)(4)(iii) of this section, or in taking any other appropriate
action to meet the beneficiary's needs and to implement the program.
(vii) The
PBM will ensure that a pharmacist is available at all times through
the toll-free telephone number to answer beneficiary questions or
provide other appropriate assistance.
(6) This
program will remain in effect indefinitely with any adjustments
or modifications required by law.
[69 FR 17048, Apr 1, 2004; 74 FR 11292, Mar
17, 2009; 74 FR 55776, Oct 29, 2009; 74 FR 65438, Dec 10, 2009;
75 FR 63397, Oct 15, 2010; 76 FR 41065, Jul 13, 2011; 78 FR 13241,
Feb 27, 2013; 78 FR 75247, Dec 11, 2013; 80 FR 44272, Jul 27, 2015;
80 FR 46798, Aug 6, 2015; 81 FR 76310, Nov 2, 2016; 82 FR 45457, Sep
29, 2017; 83 FR 63577, Dec 11, 2018]