(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]