(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]