[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                       IS THE U.S. DEPARTMENT OF

                      VETERANS AFFAIRS MEETING THE

                   PHARMACEUTICAL NEEDS OF VETERANS?

=======================================================================


                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 22, 2009

                               __________

                           Serial No. 111-42

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

                         SUBCOMMITTEE ON HEALTH

                  MICHAEL H. MICHAUD, Maine, Chairman

CORRINE BROWN, Florida               HENRY E. BROWN, Jr., South 
VIC SNYDER, Arkansas                 Carolina, Ranking
HARRY TEAGUE, New Mexico             CLIFF STEARNS, Florida
CIRO D. RODRIGUEZ, Texas             JERRY MORAN, Kansas
JOE DONNELLY, Indiana                JOHN BOOZMAN, Arkansas
JERRY McNERNEY, California           GUS M. BILIRAKIS, Florida
GLENN C. NYE, Virginia               VERN BUCHANAN, Florida
DEBORAH L. HALVORSON, Illinois
THOMAS S.P. PERRIELLO, Virginia

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                           September 22, 2009

                                                                   Page
Is the U.S. Department of Veterans Affairs Meeting the 
  Pharmaceutical Needs of Veterans?..............................     1

                           OPENING STATEMENTS

Chairman Michael Michaud.........................................     1
    Prepared statement of Chairman Michaud.......................    31
Hon. Deborah L. Halvorson........................................     2

                               WITNESSES

U.S. Department of Health and Human Services, Solomon Iyasu, 
  M.D., MPH, Director, Division of Epidemiology, Office of 
  Surveillance and Epidemiology, Center for Drug Evaluation and 
  Research, Food and Drug Administration.........................    16
    Prepared statement of Dr. Iyasu..............................    53
U.S. Department of Veterans Affairs:
    Belinda J. Finn, Assistant Inspector General for Audits and 
      Evaluations, Office of Inspector General...................    18
        Prepared statement of Ms. Finn...........................    58
    Michael A. Valentino, R.Ph., MHSA, Chief Consultant, Pharmacy 
      Benefits Management Services, Veterans Health 
      Administration.............................................    23
        Prepared statement of Mr. Valentino......................    61

                                 ______

Hoadley, Jack, Ph.D., Research Professor, Health Policy 
  Institute, Georgetown University, Washington, DC...............     3
    Prepared statement of Dr. Hoadley............................    31
Lichtenberg, Frank R., Ph.D., Courtney C. Brown Professor of 
  Business, Columbia University, New York, NY, and Research 
  Associate, National Bureau of Economic Research................     5
    Prepared statement of Mr. Lichtenberg........................    39
National Council on Patient Information and Education, Bethesda, 
  MD, William Ray Bullman, M.A.M., Executive Vice President......     8
    Prepared statement of Mr. Bullman............................    46
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................     6
    Prepared statement of Mr. Weidman............................    42

                       SUBMISSIONS FOR THE RECORD

American Federation of Government Employees, AFL-CIO, statement..    65
Stearns, Hon. Cliff, a Representative in Congress from the State 
  of Florida, statement..........................................    67

                   MATERIAL SUBMITTED FOR THE RECORD

Jeanne Ireland, Assistant Commissioner for Legislation, Food and 
  Drug Administration, U.S. Department of Health and Human 
  Services, to Hon. Michael H. Michaud, Chairman, Subcommittee on 
  Health, Committee on Veterans' Affairs, letter dated November 
  6, 2009........................................................    68
Post-Hearing Questions and Responses for the Record:
    Hon. Michael H. Michaud, Chairman, Subcommittee on Health, 
      Committee on Veterans' Affairs, to Hon. George J. Opfer, 
      Inspector General, Office of Inspector General, U.S. 
      Department of Veterans Affairs, letter dated October 1, 
      2009, and response letter and attachment dated November 12, 
      2009 [An identical letter was sent to Hon. Henry E. Brown, 
      Jr., Ranking Republican Member, Subcommittee on Health, 
      Committee on Veterans' Affairs]............................    71
    Hon. Michael H. Michaud, Chairman, Subcommittee on Health, 
      Committee on Veterans' Affairs, to Hon. Eric K. Shinseki, 
      Secretary, U.S. Department of Veterans Affairs, letter 
      dated October 1, 2009, and VA responses....................    73


                       IS THE U.S. DEPARTMENT OF


                      VETERANS AFFAIRS MEETING THE



                   PHARMACEUTICAL NEEDS OF VETERANS?

                              ----------                              


                      TUESDAY, SEPTEMBER 22, 2009

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:02 p.m., in 
Room 334, Cannon House Office Building, Hon. Michael H. Michaud 
[Chairman of the Subcommittee] presiding.

    Present: Representatives Michaud, Snyder, Teague, 
Halverson, and Perriello.

             OPENING STATEMENT OF CHAIRMAN MICHAUD

    Mr. Michaud. I would like to call the Subcommittee on 
Health now to order, and I would like to thank everyone for 
coming.
    The goal of today's hearing is to determine whether the 
U.S. Department of Veterans Affairs (VA) is meeting the 
pharmaceutical needs of our veterans. We are conducting this 
hearing because of the concerns that we have heard from our 
veterans about proper access to nonformulary prescriptions, 
concerns about adverse drug interaction and patient safety, and 
recent reports by the Office of Inspector General (OIG) citing 
the need to better manage certain aspects of the VA's pharmacy 
benefit program.
    When properly designed and implemented, formularies can 
provide drug therapy that is rational, clinically appropriate, 
safe and cost-effective. However, patients' care may be 
compromised if the formulary system is not developed and 
administered so that individuals can access drugs that they 
need. I have heard from veterans who have voiced their 
frustration with the VA National Formulary as being too 
restrictive to the point that accessing appropriate drugs is a 
barrier.
    Some veterans have pointed to a flawed subjective system by 
securing nonformulary drugs. For example, a veteran who was 
denied access to a nonformulary drug at one VA medical center 
may be approved by another medical center, which suggests that 
the decision may not be based entirely on clinical factors.
    I also have concerns about patient safety and whether we 
are doing enough to prevent the adverse drug events. Among the 
medication errors leading to adverse drug events are missed 
doses, duplicate therapy, drug-to-drug interaction, inadequate 
monitoring and preparation errors.
    And finally, the recently released audit report from the 
Office of the Inspector General raised concerns about the VA's 
management of noncontrolled drugs and Consolidated Mail 
Outpatient Pharmacy (CMOP) contracts. So we have panels here 
today of experts to help us explore these issues. And I look 
forward to hearing from them as well.
    And I would now like to recognize Mrs. Halvorson if she has 
an opening statement she would like to make.
    [The prepared statement of Chairman Michaud appears on 
p. 31.]

         OPENING STATEMENT OF HON. DEBORAH L. HALVORSON

    Mrs. Halvorson. Thank you, Mr. Chairman.
    I appreciate all of you for being here. This is one of the 
issues that is probably brought up more and more every time I 
get together with my veterans, so I appreciate having the 
opportunity to ask questions.
    Many times, people will come to me and say, how come these 
drugs are covered, and all of a sudden I get a notice saying 
that this will no longer be covered any more? So, again, I 
thank the Chairman for putting this together because this is 
one of those important issues that we need to get to the bottom 
of and make sure that we take care of our veterans. Our motto 
here is, if you were there, we care. And we need to make sure 
that we truly do care and don't just give it lip service
    Mr. Michaud. Thank you very much, Mrs. Halvorson, and I 
also want to thank you for your leadership and your advocacy 
for veterans and their families during your short timeframe so 
far here as a Member of Congress. So thank you.
    I would like to ask the first panel to come up, please.
    On our first panel we have Dr. Jack Hoadley; Dr. Frank 
Lichtenberg; Rick Weidman from the Vietnam Veterans of America 
(VVA); and William Bullman, who is the Executive Vice President 
of the National Council on Patient Information and Education.
    I would like to thank the four of you for coming forward 
today to give us your thoughts and to help us deal with this 
very important issue.
    So, without any further adieu, I would like to begin by 
asking Dr. Hoadley to begin.

 STATEMENTS OF JACK HOADLEY, PH.D., RESEARCH PROFESSOR, HEALTH 
POLICY INSTITUTE, GEORGETOWN UNIVERSITY, WASHINGTON, DC; FRANK 
R. LICHTENBERG, PH.D., COURTNEY C. BROWN PROFESSOR OF BUSINESS, 
  COLUMBIA UNIVERSITY, NEW YORK, NY, AND RESEARCH ASSOCIATE, 
   NATIONAL BUREAU OF ECONOMIC RESEARCH; RICHARD F. WEIDMAN, 
 EXECUTIVE DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM 
VETERANS OF AMERICA; AND WILLIAM RAY BULLMAN, M.A.M., EXECUTIVE 
  VICE PRESIDENT, NATIONAL COUNCIL ON PATIENT INFORMATION AND 
                    EDUCATION, BETHESDA, MD

                STATEMENT OF JACK HOADLEY, PH.D.

    Dr. Hoadley. Well, good afternoon, Mr. Chairman, and 
Members of the Subcommittee.
    My name is Jack Hoadley. I am a Research Professor at 
Georgetown University's Health Policy Institute. And as a long-
time analyst of prescription drug issues, I have conducted 
quite a few different research projects on formularies and 
other approaches to managing the use of prescription drugs, 
both in Medicare and Medicaid, in the VA and private-sector 
health plans. And I appreciate the opportunity to speak to the 
Subcommittee on these important issues.
    In the Congressional debates over the Medicare Part D 
benefit, the role of the VA National Formulary has been invoked 
on a regular basis. Some point to it as a source of low prices 
and an example that the Medicare Program might follow. And 
others claim that access to drugs is more restrictive in the VA 
system. And so, my colleagues and I took on a couple of years 
ago the idea of conducting an objective comparison of the VA 
National Formulary to the formularies that are used by some of 
the Medicare Part D plans.
    First, just a little bit of background. There is a long 
history in the VA of using formularies. It really goes back 
several decades culminating in the process of implementing a 
national Formulary just a couple of years ago, and it is 
important to note that the VA National Formulary really 
functions differently than those in many of the private health 
plans. The VA is an integrated system. Veterans go to VA 
facilities to see VA doctors and fill prescriptions at a VA 
pharmacy; whereas, in the private sector, they go get a 
prescription, go to the pharmacy, and that is where they find 
out that a drug is not covered. The VA pharmacy is more of a 
clinical tool used by physicians rather than an enforcement 
tool of the plan that is applied at the pharmacy.
    So in our analysis we wanted to compare the VA formulary 
with those used in some of the leading Medicare Part D plans, 
and we used a sample of about 160 commonly prescribed drugs. 
This was done in 2007. We wanted to look at the counts of drugs 
in the VA formulary compared with counts of unrestricted drugs 
on Medicare formularies, and by ``unrestricted,'' we mean a 
drug that is not a nonpreferred drug at a higher copay and a 
drug that does not require any kind of prior authorization or 
other utilization management restriction.
    In the straight count of drugs in the two formularies, we 
found that of our 160 drugs, the typical Part D plan covered 
about 104 of those drugs, and the VA covered about 82. The VA 
was more comparable to the major integrated health system in 
the Medicare system, Kaiser Permanente, which covered 77 and 79 
drugs in 2 of its regions in California.
    But the numerical comparison is really not the entire 
story. There are a couple of differences between how the VA 
formulary works and the perspective that Medicare plans use in 
creating their formularies. One is how they treat generic 
drugs. The VA covers about three-quarters of the generic drugs 
in our sample on its formulary, whereas most of the Medicare 
plans list all of them on formulary. And the VA is basically 
going through and looking at the generic drugs and trying to 
pick, based on clinical evidence and price, the most 
appropriate of the generic drugs to be included on the 
formulary.
    By contrast, the Part D plans, because they don't have 
relationships created with the physicians that are going to 
prescribe medications, find it easier to simply list all the 
generic drugs because, otherwise, they are going to spend time 
with rejections at the pharmacy, make their enrollees unhappy 
and, in the end, probably go ahead and approve that drug or get 
somebody to switch to a different drug. And so, as a result, 
they tend to put all the generic drugs on the list, whereas the 
VA is making a judgment on clinical evidence and price and then 
allowing an exceptions process to operate for other drugs.
    There are also some program rules in Medicare that make a 
difference there as well.
    But the other part of our analysis was to look at the 
prescribing and the frequency of prescribing of the drugs not 
listed on the VA formulary. We took a number of examples, and 
the one I will mention here today is cholesterol drugs, and 
that is one of the most commonly prescribed drug classes and 
one where some of the criticism of the VA formulary has been. 
And the VA says in their guidelines that a high-potency 
formulary statin for cholesterol, normally a generic, should be 
the first line treatment for treating high cholesterol. But the 
guidance goes on to say that physicians should consider a 
second line therapy, for example, the nonformulary drug Zetia 
or a nonformulary statin, such as Lipitor, if particular 
patient circumstances warrant it.
    And this is a guidance that is very consistent with other 
evidence-based comparative-effectiveness reviews. And we took a 
look at the prescribing of these nonformulary options, and we 
found that, in 2006, the VA actually filled 700,000 
prescriptions for Lipitor, a nonformulary statin, and 350,000 
prescriptions for Zetia that year. And this is actually more 
utilization than for some of the formulary drugs that treat 
cholesterol. So, to us, that looked like evidence that where 
drugs are not listed on the formulary, they really still are 
very much accessible to beneficiaries.
    So, in conclusion, our objective comparison does show that 
the VA formulary is modestly smaller than that in the typical 
Medicare plan, although similar to those used by integrated 
healthcare systems like Kaiser Permanente. But since, as I 
suggested, formulary size is not the only measure of access to 
drugs, we think that the difference in the two systems, the 
more integrated system where physicians had the ability to 
prescribe from a formulary that they have worked with and get 
exceptions made in what seems to us to be a pretty readily done 
basis, that in the end, the veterans are getting access, good 
access to drugs through the VA formulary.
    So, with that, I will conclude my remarks.
    [The prepared statement of Dr. Hoadley appears on p. 31.]
    Mr. Michaud. Thank you very much, Dr. Hoadley.
    Dr. Lichtenberg.

            STATEMENT OF FRANK R. LICHTENBERG, PH.D.

    Dr. Lichtenberg. Thank you, Mr. Chairman, and Members of 
the Subcommittee. I have a PowerPoint which I will refer to.
    Research that I and other economists have performed 
indicates that access to medical innovations, that is new 
drugs, medical procedures and devices, is one of the most 
important determinants of longevity and health.
    Four years ago, I performed a study that examined access to 
new drugs under the Pharmacy Benefits Management System of the 
Veterans Health Administration (VHA). And since 1997, the VA 
National Formulary has played a key role in that system. And 
some of the key findings of my report, the full text of which 
there is a link at the end of my remarks, can be summarized by 
several graphs.
    So, figure one shows the percent of drugs on the 2005 VA 
National Formulary by decade of Food and Drug Administration 
(FDA) approval. And I guess the striking thing that we see here 
is that if we look, for example, at drugs approved by the FDA 
during the period 2000 to 2005, only 19 percent of those drugs 
were on the VA National Formulary. And even if we look at so-
called priority review drugs, that is drugs that in the FDA's 
opinion represent significant advances over existing treatment, 
only a relatively small fraction of these drugs were on the VA 
National Formulary. However, even if a drug is not on the 
National Formulary, a VA patient may have access to a drug 
through the local formulary or through a formulary exception.
    And so it is important to look not just on what is on the 
formulary, as Dr. Hoadley suggested, but at the drugs that are 
actually being used by VA patients. And as a benchmark, I 
compare them to non-VA patients. And so, to do this, I used 
data from a government survey, the Medical Expenditure Panel 
Survey, where we have data on a large number of prescriptions 
consumed in both the VA system and non-VA patients. And what I 
did was compare the average age of drugs used by VA and non-VA 
patients. I define the age of a drug as how many years ago the 
active ingredient of the drug was approved by the FDA. In other 
words, Lipitor was approved by the FDA in 1996, so at this 
point, it is a 13-year-old drug. And I have found very, I 
think, compelling evidence that patients that use older drugs 
on average tend to have worse outcomes than patients using 
newer drugs.
    So what I do in this comparison is compare the age of the 
drugs used by VA and non-VA patients. And for example, if you 
look at the right hand bar, what it shows is that 39 percent of 
drugs used by non-VA patients are older than 15 years, whereas 
for--I am sorry are less than 15 years old, whereas the 
percentage that are less than 15 years old for VA patients is 
31 percent. So, in other words, the drugs used in the VA health 
system during the period 1999 to 2002 were older than the drugs 
used in the rest of the U.S. healthcare system. And in fact, 
the age of the drugs was, the relative gap was actually 
increasing. That is consistent with the hypothesis that 
implementation of the VA National Formulary beginning in 1997 
reduced utilization of new drugs in the VA healthcare system.
    But what we presumably all care about is outcomes; is 
longevity, disability, quality of life and so forth. I have 
done a number of studies and some other economists have as well 
about the impact of medical innovation and pharmaceutical 
innovation in particular on longevity and other health 
outcomes. And in this paper, I present some new estimates that 
suggest that the use of older drugs in the VA system may have 
reduced the life expectancy or mean age of death of VA patients 
by about 2 months. Now that doesn't sound like a very 
significant number; however, there is other evidence that 
suggests that people's willingness to pay, Americans' 
willingness to pay to extend their lives is quite high, so the 
per-patient value of that reduction in longevity may exceed 
$25,000 per person.
    I also use demographic data published by the VA to compute 
the life expectancy of veterans both before and after the 
National Formulary was implemented. And here the picture is the 
following, that starting in 1991, from 1991 to 1997, the life 
expectancy of American veterans increased by about 3 years. 
However, it stopped increasing after 1997 and maybe even 
declined a little bit, and that coincides pretty precisely with 
the implementation of the VA Pharmacy Benefits Management 
System. So I think that that is evidence that needs to be 
considered further.
    Thank you.
    [The prepared statement of Dr. Lichtenberg appears on p. 
39.]
    Mr. Michaud. Thank you very much, Dr. Lichtenberg.
    Mr. Weidman.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Mr. Chairman, first of all, I want to thank 
you for your leadership in holding this hearing today.
    There really are two levels of issues here on the table. 
The first is, and the one which our written statement primarily 
concerns itself with, is access to getting new medications on 
the formulary to begin with. We believe that it is 
inappropriate cost management at the cost of proper clinical 
care. Many drugs are not making it on. That is a clinical 
decision.
    And that process by which things go on is a closed process. 
In other words, it is not a transparent process. The advocates, 
the veterans service organizations, the medical societies do 
not have the opportunity to comment. There is no recipient 
advisory group that has a chance to have the say for what the 
veterans and their families have to say about this; what does 
the medical community in general have to say about this?
    Cutting to the chase, what we propose and urge you to 
consider is moving to introduce legislation that will make the 
VA formulary mirror that at U.S. Department of Defense (DoD). 
The DoD formulary, everything, as soon as it is FDA approved, 
as soon as practical, which is usually a short period of time, 
it goes on the DoD formulary or the TRICARE formulary.
    The veterans on active duty suddenly shouldn't feel the 
pinch that those who are no longer on active duty, either 
because they retired or because of longevity or because they 
have ended their term of service because they got wounded, 
should have the access to the full range of drugs that those on 
active duty should have. That is also incidentally an open and 
transparent process. It is warned. There are public meetings. 
There are minutes, and there are a number of recommendations, 
which actually Secretary Shinseki can take even without such 
legislation, but we would encourage you to move ahead and to 
develop comprehensive legislation in association with your 
friends over at the House Armed Services Committee, who are 
thoroughly familiar with that process, and move forward to do 
it.
    One of the fallacies of limiting the formulary is that we 
are saving money. We would argue that it is penny wise and 
pound foolish. Oftentimes the lack of the proper medication at 
the proper time because it wasn't on the formulary leads to all 
kinds of healthcare impact that results in sicker patients and 
episodes that did not have to happen.
    I will use, just as one example, diabetes. And you may 
recall that a patient advocate leadership summit last year with 
veterans service organizations came together in Washington, and 
we focused on four diseases. One of those was diabetes, and 
what stunned all of us in the veterans service organization 
community is that, in fiscal year 2006, two-thirds of the cost 
of care for diabetes went into acute inpatient stays.
    Let me say that again: Two-thirds of the total cost of 
treating the 1.2 million diabetics who go to the VA for their 
healthcare was in inpatient treatment services. What that means 
is, when you have to put somebody in the hospital who is under 
a physician's care who has diabetes is that you failed. You 
have failed big time.
    And as a result of that, that is very expensive. It causes 
secondary conditions, which leads to amputations of limbs. It 
causes all kinds of secondary conditions which are then 
themselves service-connected compensable. This is particularly 
true for Vietnam veterans, where those of us who served in 
Vietnam where diabetes is in fact service-connected 
presumptive. That is one level.
    I don't have much time to comment on the second level 
except to say that the overall management, people are generally 
happy with the timeliness of the medications, assuming that 
they can get the medications that they need off of the 
formulary. But by changing what goes on to the formulary, you 
have competent people to manage the system.
    But I cannot stress too strongly that while they say that 
unions sometimes mirror the worst excesses of the business 
industry in which they organize, in this case, the VA has 
mirrored the worst in past decade or 15 years of the 
pharmaceutical industry, which lost its way for a time and 
seems to be finding its way again, where they forgot they were 
in the health business. That is the business they are in, in 
helping people get well, stay well as long as possible, and 
they are not in the cost-containment or selling the most 
widgets or having the highest cost reduction on the case of the 
government side or their cost margin and profit margin on the 
case of the private industry side.
    Mr. Chairman, once again, thank you very much for holding 
this hearing today. And I would be happy to answer any 
questions sir.
    [The prepared statement of Mr. Weidman appears on p. 42.]
    Mr. Michaud. Thank you very much.
    Mr. Bullman.

            STATEMENT OF WILLIAM RAY BULLMAN, M.A.M.

    Mr. Bullman. Good afternoon, Mr. Chairman, Members of the 
Subcommittee.
    I am Ray Bullman, Executive Vice President of the National 
Council on Patient Information and Education, NCPIE. I have 
been asked to testify this afternoon relative to three areas: 
one, the broad range of patient medication safety issues; two, 
best practices or innovative means that our coalition members 
employ to enhance medication safety; and three, how NCPIE as a 
multi-stakeholder coalition meets its mission to stimulate and 
improve communication of information on appropriate use of 
medicines to consumers and healthcare professionals.
    I would note at the outset that while NCPIE does not focus 
specifically on formulary issues, we recognize the impact that 
formulary decision-making plays downstream on patient and 
healthcare provider communication, informed decision-making 
about therapy choice, and what medication is prescribed and 
ultimately to what extent patients effectively self-manage 
their medication therapy. NCPIE is, therefore, pleased to help 
support the work of the Subcommittee.
    In my written testimony, I have outlined specific safety 
issues deriving or arising from each of nearly a dozen 
medication-use and safety issues that impact medication safety. 
If I may, I would address just one of these equally important 
and much-entwined medication safety issues as a way of 
demonstrating the magnitude of the problem and the vital role 
that VA pharmacists can play in addressing it. That issue is 
medication nonadherence, which just recently was estimated to 
cost the U.S. economy over $290 billion annually or 13 percent 
of total healthcare expenditures.
    I hold out medication nonadherence by way of example 
because it is so multifactoral in its cause and so emblematic 
of a wide range of medication-use problems patients experience 
beyond simply not being able or willing to follow prescribers' 
directions on the vial, for example. For example, it embodies 
the challenges of polypharmacy.
    During the last decade, the number of medicines available 
to treat many chronic diseases has increased. NCPIE supports 
and promotes efforts to conduct medication reconciliation that 
results in a more complete medication record for providers and 
pharmacists, and applauds the Joint Commission for its 
leadership and its members working to establish effective 
medication reconciliation within the hospital setting and back 
out to patients' healthcare providers in the ambulatory care 
setting.
    Medication nonadherence also brings to the fore issues like 
the complexity of the medication regimen, multiple prescribers 
who do not communicate amongst themselves, concerns about side 
effects and concerns about costs, for example.
    In my written testimony, I have described several best 
practices programs or policy recommendations that several of 
the NCPIE member organizations, mostly pharmacy and patient-
safety groups, advance to enhance medication and patient 
safety. These range from collaboratively developed medication-
therapy-management guidelines for pharmacists such as the 
American Pharmacists Association and the National Association 
of Chain Drugs Stores has developed and produced, for example, 
or the establishment of and roles and responsibilities of the 
Medication Safety Officer within the hospital setting, or 
online medication safety self-assessment tools designed to help 
health organizations assess the medication safety practices in 
their respective institutions.
    Area three is how NCPIE works to meet its mission through 
its broad membership. NCPIE works to meet its mission through 
both in-house development and implementation of educational 
products, programs and services, and through convening or 
participating in collaborative programs with both member and 
nonmember groups. Each of the following examples enables NCPIE 
to promote and disseminate a wide range of educational 
resources, including educational videos, medication wallet 
cards, personal medication lists, and key questions that each 
consumer and healthcare provider should discuss before any 
medication therapy is initiated.
    We also work through creation of a dedicated reoccurring 
event, ``Talk About Prescriptions'' Month, each October, the 
purpose of which is to enable high-quality medicine 
communication to have its rightful place on the public health 
landscape and agenda. This October will mark the 24th annual 
``Talk About Prescriptions'' Month. We also work through key 
external partnerships with our ``Be MedWise: Safe Use of Over-
the-Counter Medicines Campaign.'' We have collaborated and 
partnered with the Food and Drug Administration, the American 
Pharmacists Association and the Surgeon General's Office, then 
Dr. Richard Carmona, to expand the scope of the campaign.
    NCPIE also licenses content, for example, for its ``Be 
MedWise'' campaign to two State universities through their 
cooperative extension programs for Be MedWise Tennessee, a 
statewide initiative, and Be MedWise Arkansas.
    We also work through convening expert project advisory 
teams. Our most recent product is ``Maximizing Your Role As a 
Teen Influencer: What You Can Do to Help Prevent Prescription 
Drug Abuse.'' We worked with 14 national expert organizations 
on developing that program.
    And last, we work with external coalitions. For example, we 
are a member of the National Coordinating Council for 
Medication Reporting and Prevention and the Safe Medication 
Disposal for ME, or Maine, program; we are a member of that 
advisory team.
    I would thank the Subcommittee for inviting NCPIE to 
testify, and I look forward to answering any questions you may 
have. Thank you very much.
    [The prepared statement of Mr. Bullman appears on p. 46.]
    Mr. Michaud. Thank you very much, each of you, for your 
testimony, and I do have a few questions.
    I will start off with Dr. Hoadley. The Institute of 
Medicine (IOM), over a decade ago, came out with a report that 
found VA had a responsive process in place for assuring access 
to medically necessary drugs to the formulary. Do you believe 
that the Institute of Medicine's original findings still apply 
today? And if not, do you think they should be updated?
    Also, could you comment on Mr. Weidman's suggestion that 
the VA should be very similar to what the DoD has in place when 
they deal with the formulary?
    Dr. Hoadley. To take the second question first, I have not 
taken a look at the DoD formulary in my own research, so I 
can't speak directly to that.
    One question would need be raised in looking at how the DoD 
formulary works. To the extent that the TRICARE program is like 
the way Medicare drug program works and operates through a 
number of private health plans, it is a somewhat different 
environment than the VA system, which as an integrated health 
system. That means a formulary really works differently.
    I think that is an important point to emphasize. In an 
integrated system, the idea, if things are working correctly, 
is that the physicians have collectively bought into the 
formulary. They have some role in helping to plan and have 
input into the formulary, and then they are really committing 
themselves to prescribing from the formulary where possible and 
then getting exceptions where it is needed for particular 
patient circumstances. So that is really part of the question 
to ask.
    In terms of your first question on the IOM study, I think 
my findings are generally consistent with what that study found 
several years ago, that the VA system does seem to be operating 
well; the formulary does seem to be serving the needs of 
veterans. And our findings of drugs that are on the formulary 
itself and the relative ease with which exceptions seem to be 
provided given the numbers of prescriptions for nonformulary 
drugs that we identified seem to support that.
    I know at the time of the IOM study, there were a couple of 
different surveys done of physicians to ask physicians whether 
they felt they were able to prescribe adequately from the 
formulary and to get exceptions where needed. At the time, 
those surveys generally supported that idea. It could always be 
helpful to go back and conduct such surveys again to see 
whether physicians in the VA system still feel they are able to 
get the exceptions when needed and are able to prescribe well 
from the formulary.
    Mr. Michaud. Thank you.
    Dr. Lichtenberg, in addition to your concern with the older 
drugs on the VA formulary, do you believe that the current size 
of the VA formulary is adequate? Should it be updated to 
include newer drugs?
    Dr. Lichtenberg. To be quite honest, I have not looked at 
the current state of the VA formulary, so I couldn't really 
comment on that.
    But I would say it is my impression that there have not 
been dramatic changes in policy since I did the study in 2005, 
and therefore there is, for example, a policy that no drug will 
be listed, only under extraordinary circumstances, perhaps 
human immunodeficiency virus drugs, within, until 1 year after 
it has been approved by the FDA. So there is a general 
predisposition against listing new drugs on the formulary. I 
think that that policy continues and that it is potentially 
having adverse effects on the healthcare of veterans.
    Mr. Michaud. Are you familiar at all with the DoD process 
in getting drugs on the formulary?
    Dr. Lichtenberg. I am afraid that I am not.
    Mr. Michaud. Thank you.
    Mr. Weidman, you brought up a very good suggestion about 
looking at the DoD formulary and the process that they go 
through, and reading your testimony I assume that that process 
is more transparent than the VA process.
    That being said, can you tell me what process a veteran or 
someone would have to go through to get a physician to 
prescribe a drug that is not on the formulary? Is it a 
cumbersome process? Have you heard of any complaints about 
counselors getting supervised or reprimanded by the supervisor 
if they go off the formulary?
    Mr. Weidman. The answer is, it is extraordinarily 
difficult. It takes a lot of time. It is a cumbersome process 
and deliberately so. And even incidentally for some expensive 
drugs that are on the formulary, they will put them on fourth 
or fifth screen back and make it difficult for people to access 
the more expensive drugs at some stations. And nobody has 
really looked at that, and nobody is policing that.
    The issue over trying to get medications that are not on 
the formulary, that is always VA's rejoinder, is that the 
formulary is fine because people can get anything that is not 
on the formulary when it is clinically indicated.
    But that is just flat not true as a practical matter. We 
hear from clinicians all the time both in physiological and in 
neuropsychiatry that if they take things and make 
recommendations for drugs that are not on the formulary, not 
only does it take an enormous amount of time when they are 
under pressure to see patients, face-to-face encounters with 
patients, but also they get spoken to. They get spoken to 
enough times, and they don't, and they are down the road; it is 
as simple as that.
    And it is clearly a conscious policy. Part of the problem 
is the way in which we have misapplied comparative 
effectiveness within the VA so that it becomes a race to the 
bottom, so that the pharmacy is measured about cost avoidance 
below the national mean average. Well, what happens if you have 
all 152 stations doing that, of trying to get below the mean 
average? Well, it continues to go down. And that is the wrong 
measure. What chief pharmacists and all pharmacists ought to be 
measured against is how much did you contribute to the overall 
wellness of the individual patients at this medical center and 
avoid inpatient stays and keep the patient more healthy and 
contributing for those of working age to the overall economy. 
Those should be the questions we should be asking. And it is 
possible to develop metrics that way. People are going to do 
what you measure them on. It is as simple as that. And we need 
to change the way in which we think about pharmacy at the VA, 
and we need to change the way in which VA measures it 
internally.
    And one last thing, if I may mention on that issue, you 
asked about the IOM. We do need to revisit the IOM because what 
the IOM said is, there are no good metrics inside the VA to 
measure what is going on and to analyze it from the outside. 
And that is still the case today. And if they have 
measurements, they are refusing to share it with anybody. And 
once again, stuff that happens in the back room is where bad 
stuff happens. We are a democracy. This should be done out in 
the sunshine. And the way in which the DoD process happens is 
it is a totally public process with an advisory committee and 
with minutes and people can attend, and it is warned in the 
Federal Register, et cetera, et cetera. And we need the same 
kind of process with the VA and that a lot of the problems, we 
believe, if we adopt the DoD policy on formulary will come to, 
will go away.
    Just one last thing. The theory is that clinical stuff is 
taken into account at the VA. And with all due respect, the way 
you mentioned before about clinical evidence and it is 
collaborative decision of the doctors; well, it is not. It is 
not. The green-eyed boys always trump. The cost always trumps 
clinical evidence when it comes to putting things on the VA 
formulary. So that, even when they are looking through the 
molecular entity process that they have set up, they can go all 
the way through that and have strong evidence about cost 
effectiveness as well as the efficacy of the drug, and then the 
formulary people, the pharmacy people can still veto it just on 
the basis of cost and impact on the pharmacy. And this is just 
not right.
    Clinical decisions need to predominate throughout the VA. 
And if we can't do that, then we are certainly not delivering 
care second to none. One could argue that then it is care 
second to all. And that is not the way we should be doing 
business, and frankly, we have so many wonderful clinicians in 
the VA, if we can fix the system and let them do their job, we 
will be care second to none.
    Mr. Michaud. Thank you very much.
    Mr. Weidman, you mentioned the DoD formulary. Since there 
are more drugs on that formulary than on the VA formulary, have 
you heard complaints where a servicemember may be using a 
certain drug that is on the DoD formulary, moves to the VA 
system, and is no longer able to get that medication?
    Mr. Weidman. I have, and also our friends in modern warfare 
have told me many of those problems as well where people are 
kind of stunned because, particularly those that come out of 
Walter Reed, and Walter Reed still has some problems 
particularly with medical boards and with case management, but 
it is overall, you know, a fabulous facility, and all of a 
sudden, bang, they hit the VA system back home in Michigan or 
Togus or wherever the case may be, and one of the things they 
hit is the formulary and difficulties, particularly those who 
have traumatic brain injury (TBI) and seizures. It is very 
difficult because a lot of those things are not on the 
formulary, and therefore, their doctors have to go through 
circumlocutions. They can get it. Their VA doctors are willing 
to do it, but it is not right that they should jump through 
hoops.
    Those are the kinds of things that should automatically be 
presumed to be in, and we need to balance the system so we go 
back to clinical input at every step of the way and achieve a 
balance between cost and best clinical care, and currently, we 
would argue that cost is trumped all the way down the line on 
this one.
    Mr. Michaud. Thank you very much.
    Mrs. Halvorson.
    Mrs. Halvorson. Thank you, Mr. Chairman, and thank you all 
for being here.
    I have got several questions, and I guess I am not sure 
where to start.
    First of all, again, the IOM study, actually is in quotes, 
where it says that it has a responsive process in place where 
assuring access to medically necessary prescription drugs. So--
oh, for exceptions to the formulary. So that actually is said 
in the study that was done almost a decade ago, so obviously we 
need to look. How do you feel about the fact that that is 
actually written in this IOM study that obviously needs to be 
taken a look at?
    Now, Mr. Weidman, you have said that we need to take a look 
at that again. So it is one thing to say we need to take a look 
at it and another thing to do it. So what would you suggest, 
because you say most of these things are done behind closed 
doors, how do you profess that we take this out and do it in 
the open? Do another study first? What would be your idea?
    Mr. Weidman. Well, the IOM study, by the time you get it 
going is going to take a year and a half, and I would suggest 
that many of the things in the recommendation section of my 
statement, Congresswoman, are things that the Secretary could 
start doing right now to open up this process while the 
Congress considers whether or not to change the statute and 
mirror that which is used by DoD and TRICARE and TRICARE For 
Life, that mandating or just requesting with this Secretary, I 
think you can just request to him that he contract with the IOM 
to do another study.
    Now the way in which that RFP or that request for a 
proposal is drawn, that contract with the Institute of Medicine 
is something that, frankly, the committee should have direct 
input in on as well as the veterans service organizations and 
other advocates because sometimes those contracts are designed 
to make sure that you don't get at what is the part of the 
original intent.
    And so that would be one way of doing it.
    Second I think it would be useful to have the U.S. 
Government Accountability Office (GAO) in the short term look 
at some of the areas that we know are of concern. As an 
example, Alzheimer's drugs, has it had a tremendous negative 
impact on people not having the latest Alzheimer's drugs? As 
many of you know, some of our older veterans, even some of the 
older Vietnam veterans, but certainly the Korean and World War 
II vets are subject to Alzheimer's. Nobody has come up with a 
cure for Alzheimer's yet, and we are not suggesting that there 
is. All you can do is slow it down. So when you slow down those 
new medications that are coming on the market and have come on 
the market in the last 3, 4, 5 years from being available to 
those World War II and Korean veterans, they are never going to 
get better after they have--by the time VA puts it on the 
formulary, if indeed they ever do under existing circumstances.
    So what I am saying is that you can look at that and point 
to problem areas with the help of GAO at the same time that you 
pursue a study with the Institute of Medicine, ma'am.
    Mrs. Halvorson. Great. Thank you. I appreciate your 
suggestion.
    Mr. Bullman, I know that the VA is not a member of your 
group. What kind of suggestions could you give us? Because it 
sounds to me like it is a wonderful group to be able to help 
our veterans maybe take their medications the right way, 
because, first of all, we are talking about the fact that we 
are having trouble getting them. But once we get them, we are 
finding out that one of the major problems is following up and 
making sure that they not only take it, but they take it in the 
right doses and finish the medication.
    Do you have any suggestions for all of us in order to help 
the veterans in our system?
    Mr. Bullman. That is a great question, and NCPIE would 
certainly invite and encourage the VA to become a member of our 
Council, but that said, we work oftentimes with representatives 
from VA pharmacy on the various external coalitions, such as 
the National Coordinating Council for Medication Error 
Reporting and Prevention, for example.
    The materials that NCPIE makes available, not just our 
brochures and pamphlets and things like that, but reference-
based reports I think would certainly be conducive for helping 
to at least raise the issue and the impact of nonadherence.
    The best medicine in the world taken inappropriately or 
incorrectly will have no impact and leads to the downstream 
problems and sequelae that we are talking about here. Our 
mantra has been for 25 years, ``Educate Before You Medicate.'' 
And we provide the educational tools and resources for both the 
healthcare team, physician, pharmacist, nurse practitioner, 
physician assistant, the questions to ask. But there needs to 
be that commitment of a teachable moment at the point of not 
just prescribing, dispensing but throughout the patient 
pathway, when he or she has the opportunity to either ask 
questions, recognizing the reluctance of consumers and patients 
who are vulnerable and critically ill often to ask questions. 
There needs to be the involved role of the caregiver as well. 
So there are no magic bullets here, but there is a lot of 
practical hands-on time and involvement.
    The art of medicine needs to come back into this. And part 
of the art of medicine is communication. So everything that we 
do is about moving patient and healthcare providers to an 
equally positioned discussion about medicines and safe medicine 
use.
    Mrs. Halvorson. Thank you.
    And thank you, Mr. Chairman.
    Mr. Michaud. Thank you very much.
    Mr. Snyder.
    Mr. Snyder. I just have one question, Dr. Hoadley.
    Did you have any response to, there were some comments made 
I think that referred to your previous testimony that I didn't 
hear? Do you have any comments you want to make about the last 
few minutes of discussion of question and answer?
    Dr. Hoadley. I think some of the suggestions that Mr. 
Bullman was just talking about are great suggestions in terms 
of trying to improve adherence, making sure people are well-
informed about the medications they are taking.
    On some of the other comments about the formulary and its 
treatment of newer drugs, I think a couple of things should be 
kept in mind. We really had a number of studies recently that 
suggest, for at least some drug classes, some of the older 
tried-and-true medications turn out to be just as effective or 
even more effective than some of the newer medications. So it 
is important to realize that newer does not necessarily equal 
better drugs.
    Beyond that, I think the question of the ability to get 
exceptions from the formulary is really a critical one, and our 
numbers suggest we are seeing three-quarters of a million 
prescriptions for a nonformulary drug like Lipitor for 
cholesterol. There are various numbers that can be looked at, 
but in the end, the real question could be served by some kind 
of additional study. A survey of physicians is one way to do 
that, to simply find out whether the physicians that are 
treating the veterans do feel themselves that they are able to 
prescribe the drugs that they really want to prescribe and 
whether they feel it is as difficult to get exceptions as Mr. 
Weidman suggested in his comments or whether the numbers that I 
see in terms of the actual number of prescriptions for some of 
these nonformulary drugs suggest that they are able to get 
prescription exceptions when needed. I think that that is 
something that empirical evidence can be brought to, and we can 
understand that question better.
    Mr. Snyder. Mr. Weidman, what is your sense from veterans 
that are in the system--I think you talked about this, too, but 
if you would amplify on that. You and I are both Vietnam 
veterans. If I were to go down to the VA clinic, I was there a 
day or two ago, I mean at the hospital a day or two ago, what 
is your sense of how quickly it would take to get a 
nonformulary drug approved? I mean, if I am sitting there with 
a primary care doctor, is it just a matter of him writing a 
special prescription that says ``this drug only'' or----
    Mr. Weidman. No, it is not.
    Mr. Snyder. What is the length of the approval process and 
the length of time? Is it cumbersome?
    Mr. Weidman. It depends on the type of drug, and it depends 
on how expensive it is, at least that is what I gather from the 
outside and talking to clinicians and talking to veterans who 
have been told this by their clinician, and some, in some 
cases, it can take up to a week or 2 weeks about whether or not 
to go with the off-formulary. Some things like the atypicals, 
like schizophrenia, they say you have to go for 3 months on the 
generics, and then, if it doesn't work, then we will try to use 
the atypicals.
    Well, you know, it is like what I was talking about before 
with the misuse of comparative effectiveness. If you are part 
of the 15 percent that the generic does not work as well for, 
and your physician has some reason to believe that that is the 
case, you are in duck soup, because you can't get this stuff 
that you need.
    And we have had that experience with diabetes medication 
that people were seeing somebody on the outside, and then they 
go to the VA because they, typically what happens is the 
Vietnam vet who is in-country, finds out that it is service-
connected presumptive or he or she retires or loses their job, 
and then they turn to the VA for their healthcare, and then 
they discover that the diabetes medication they have been on 
for 5 years or 3 years, you can't get at VA, and it is very 
hard to get those exceptions.
    It took us, I think it was 8 months, 9 months, pressing 
hard to get the long-lasting insulins added last year to the VA 
formulary, and we had to go with the white paper. And it was 
through the good offices of this Committee that it finally got 
added on to the formulary, because people couldn't get it, 
virtually, by going off-formulary through the process.
    Mr. Snyder. Thank you.
    Thank you, Mr. Chairman.
    Mr. Michaud. Thank you.
    Once again, I would like to thank each of you for your 
testimony today. There might be some additional questions that 
we will ask in writing. Hopefully you will respond in a timely 
manner. I really appreciate each of your testimonies here this 
afternoon, so thank you.
    I would like to ask the second panel to come forward. While 
they are coming forward, we have Solomon Iyasu, who is a 
Director of a Division within the FDA, U.S. Department of 
Health and Human Services (HHS). We also have Belinda Finn who 
is accompanied by Irene Barnett, who are both from the VA 
Office of Inspector General.
    I want to thank all three of you for coming here this 
afternoon to give your testimony, and we will start off with 
the good doctor.

 STATEMENTS OF SOLOMON IYASU, M.D., MPH, DIRECTOR, DIVISION OF 
 EPIDEMIOLOGY, OFFICE OF SURVEILLANCE AND EPIDEMIOLOGY, CENTER 
FOR DRUG EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, 
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; BELINDA J. FINN, 
ASSISTANT INSPECTOR GENERAL FOR AUDITS AND EVALUATIONS, OFFICE 
  OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
  ACCOMPANIED BY IRENE BARNETT, PH.D., AUDIT MANAGER, BEDFORD 
OFFICE FOR AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, 
              U.S. DEPARTMENT OF VETERANS AFFAIRS

             STATEMENT OF SOLOMON IYASU, M.D., MPH

    Dr. Iyasu. Thank you, Mr. Chairman.
    Mr. Chairman, and Members of the Subcommittee, I am Dr. 
Solomon Iyasu, Director of the Division of Epidemiology within 
the Office of Surveillance and Epidemiology for Center for Drug 
Evaluation and Research of the Food and Drug Administration.
    I am pleased to be here today to discuss FDA's role in 
identifying and communicating drug safety issues as well as our 
collaboration with Veterans Affairs. FDA is charged by Congress 
with the authority to review new drug applications for safety 
and effectiveness. Adverse reactions reported during the 
clinical trials of the drug are included in the labeling 
information.
    All drug products contain risks as well as benefits, and it 
is often impossible to predict which individuals may have 
increased sensitivity to particular drugs. No amount of 
premarket study can provide all of the information about the 
effectiveness or all the risks of a new drug when it is used by 
the general population.
    Once FDA approves a drug, the post-market monitoring stage 
begins. A drug manufacturer is required to submit regular post-
market reports to FDA. Also, FDA receives adverse-event reports 
directly from the public through our MedWatch Program. These 
reports are reviewed and analyzed by FDA epidemiologists and 
safety evaluators to assess the frequency and seriousness of 
the adverse events and to determine their association with 
medication usage.
    As more becomes known about the potential risks or benefits 
of a drug, often its FDA-approved labeling will be revised so 
that it better reflects information on appropriate use. If 
labeling alone is inadequate to manage risks, additional 
actions may include revising drug name or packaging, issuing 
``dear healthcare professionals'' letters, disseminating 
educational special-risk communications, or requiring 
restrictive distribution programs.
    FDA uses a broad range of methods to communicate drug 
safety information to the public. The different types of drug 
safety communication includes labeling, early communications 
about ongoing safety reviews, public health advisories, 
healthcare professional sheets, and other methods of 
communication, such as video broadcasts and conference calls.
    Manufacturers also use various methods to communicate drug 
safety information. A manufacturer may distribute a ``dear 
healthcare professional'' letter to convey important 
information regarding the marketed drug.
    FDA's Drug Safety Oversight Board was established in 2005 
to oversee the management of drug safety issues and 
communication to the public about the risks and benefits of 
medicines. The board is made up of FDA and medical experts from 
other government health agencies and government departments, 
including Veterans Affairs.
    Along with other FDA colleagues, I am a primary participant 
from the Office of Surveillance and Epidemiology (OSE) in 
addition to the OSE Director and my counterpart in OSE's 
Division of Pharmacovigilance.
    Also, the FDA and Veterans Affairs have a memorandum of 
understanding (MOU) for sharing information to enhance post-
market surveillance efforts and other drug and vaccine safety 
projects. The goals of the collaboration are to explore ways to 
promote efficient use of tools and expertise for product risk 
identification, validation, and analysis, and to build 
infrastructure and processes that meet shared needs for 
evaluating the safety, efficacy and use of drugs, biologics and 
medical devices.
    In August 2008, the FDA and Veterans Affairs signed an 
interagency agreement which allowed FDA to provide funding to 
Veterans Affairs for work on safety issues of mutual interest. 
This agreement allowed funding for personnel time and 
programming costs associated with analysis of VA data to 
explore questions of interest that were raised by FDA but also 
of interest to Veterans Affairs. It is currently in the process 
of being renewed for another year.
    In September 2007, Congress passed the Food and Drug 
Administration Amendments Act, which included new resources for 
medical product safety that requires the HHS Secretary to 
establish a post-market risk identification and analysis system 
to link and analyze healthcare data from multiple sources. The 
Sentinel Initiative is FDA's response to this mandate. Its goal 
is to build and implement a new active surveillance system that 
will eventually use electronic health information to monitor 
the safety of all FDA-regulated products.
    The Sentinel Initiative is a long-term effort that must 
proceed in stages, and this effort is well under way. The FDA 
is collaborating with the Federal and private sectors in 
various activities that would inform the development of this 
system.
    In December 2008, the FDA held a public meeting on the 
Sentinel Initiative to obtain input from stakeholders about the 
structure, function, and scope of the project. The Director for 
the Center for Medication Safety of the Department of Veterans 
Affairs was among the participants at this day-long meeting, 
presenting on the issue of risk communication.
    After the initial step of creating the Sentinel System, the 
FDA is initiating various pilot efforts to further the science 
of medical product surveillance. One of these pilots, known as 
Mini-Sentinel II, would include our Federal partners. We look 
forward to the VA's participation in this effort. The effort 
involves creating a distributed system that will focus on 
developing methodologies to obtain more information on emerging 
drug safety issues. The Sentinel System will augment the 
Agency's current post-market surveillance tools to strengthen 
FDA's ability to ensure that safe and effective new drugs are 
available to the public, and that the risks of marketed drugs 
are well understood.
    The FDA has a critical role in the detection and management 
of safety issues that are identified after a drug is approved, 
including a critical role in communicating information to the 
public. Our goal is to make the most up-to-date drug safety 
information available to the public in a timely manner so that 
healthcare professionals and patients can consider the 
information when making decisions about medical treatment. Our 
ability to fulfill our mission is enhanced by our partnerships 
with patients, physicians, pharmacists, industry, State 
regulators and other partners like Veterans Affairs. Together 
we can help ensure the safe use of marketed drugs by providing 
the best possible information to the American public.
    Once again, thank you for the opportunity to testify to the 
Subcommittee today.
    [The prepared statement of Dr. Iyasu appears on p. 53.]

                  STATEMENT OF BELINDA J. FINN

    Ms. Finn. Chairman Michaud and Members of the Subcommittee, 
thank you for the opportunity to be here today and discuss 
VHA's accountability for noncontrolled drugs. We have recently 
issued two audit reports that address systemic weaknesses at 
VHA's medical facilities and consolidated mail outpatient 
pharmacies, commonly known as the CMOPs.
    Joining me today is Irene Barnett, an audit manager from 
our Bedford audit office.
    In 2008, VHA medical facilities and the 7 CMOPs dispensed 
about 126 million prescriptions and spent $3.7 billion on 
pharmaceuticals. About 95 percent of those dollars went for 
noncontrolled drugs. Although noncontrolled drugs are not 
subject to the stringent inventory and oversight controls, they 
are subject to diversion, since they are often expensive, have 
a high street value, or contain active ingredients that can be 
used to manufacture illicit drugs.
    We reported VHA medical facilities and the CMOPs could not 
adequately account for their noncontrolled drugs because of 
inadequate inventory management practices, recordkeeping, and 
inaccurate pharmacy data.
    At the CMOPs, we found pill count differences ranging from 
a negative of 3,100 pills to a positive 192,000 pills. At the 
medical centers we also identified both positive and negative 
variances. For example, 24 of 31 medical facilities reviewed 
had a positive variance for at least 1 drug. These positive 
differences in pill counts are significant because they 
represent pills that are available to dispense or divert 
without anyone knowing since they don't exist according to the 
records.
    Physical inventories act as a check on the effectiveness of 
other inventory controls; however, the VHA's VistA system 
cannot maintain a perpetual inventory that would provide 
accurate information.
    We also found problems with the recording of drug 
transactions. For example, the local pharmacy personnel were 
not consistently recording returns to stock from the pharmacy. 
Physical security controls were in place at the CMOPs we 
visited to prevent the unauthorized physical removal of 
pharmaceuticals; however, the inventory systems contained 61 
users who could order, receive, and adjust inventories without 
any oversight.
    Those same CMOP inventory systems contain generic user 
accounts that allowed employees to anonymously order drugs, 
reduce the inventory balance, and divert the drugs.
    Finally, when the physical and the inventory counts don't 
match, CMOP personnel simply adjust the inventory balance to 
match the physical count.
    In 2003, VHA initiated the Pharmacy Reengineering Project 
to improve VistA's accountability for drugs. Although this 
system development was originally slated for completion in 
2005, it has experienced significant delays and is currently 
halted for a review.
    During our reviews, we recommended the Under Secretary for 
Health improve accountability over noncontrolled drugs by 
enforcing annual wall-to-wall inventories, establishing better 
control over drug transactions, and correcting the CMOP 
information security weaknesses.
    The Under Secretary for Health agreed with all of our 
recommendations and has provided acceptable plans to implement 
our recommendations and correct the weaknesses.
    That concludes my statement. We will be happy to answer any 
questions you may have.
    Mr. Michaud. Thank you very much. It has been very helpful.
    [The prepared statement of Ms. Finn appears on p. 58.]
    Mr. Michaud. Do you believe that the national CMOP remains 
the preferred model for acquiring pharmaceutical supplies and 
services, and are you aware of whether that is the same process 
that the DoD goes through?
    Ms. Finn. I can't speak to the DoD process. I know the CMOP 
model and the VHA model of a prime vendor to centrally acquire 
and distribute pharmaceuticals and supplies has been an 
effective model for VHA. It is actually managed and operated 
out of the National Acquisition Center, the contracts that 
supply the pharmaceuticals and the supplies. And I believe VHA 
gets effective pricing, probably about 26 percent better on 
pharmaceuticals than other Federal customers.
    Mr. Michaud. You mentioned the monitoring of inventorying 
for noncontrolled drugs. Do you have a sense of whether this is 
an issue in the private sector, and if not, do you think the VA 
can learn something from the private sector as it relates to 
monitoring their inventorying? Or do you think the 
recommendation that you made to the VA would be sufficient to 
take care of the problem that is out there?
    Ms. Finn. During our review we did speak to pharmaceutical 
managers in the private sector, and they did provide monitoring 
over noncontrolled drugs that they considered subject to 
diversion.
    Also, during our review we found a number of VHA pharmacy 
managers were monitoring drugs even before our work. And after 
we conducted our work and noted the differences between the 
physical inventories and the actual drugs on the shelf, many of 
those managers took steps to monitor more drugs.
    So I think at this point I would consider our 
recommendations a good step forward. In a few years perhaps we 
will go back and determine whether or not more action is 
needed.
    Mr. Michaud. Doctor, in your testimony you noted that the 
FDA and VA signed an interagency agreement allowing FDA to 
provide funds to the VA to work on safety issues of mutual 
interest. Can you expand more on this point, and do you have 
the same type of agreement with DoD?
    Dr. Iyasu. The kind of work that we do under this 
interagency agreement is--it comes under the greater umbrella 
which is the MOU, the memorandum of understanding that we have 
between the FDA, VA, and DoD. We specifically have this 
interagency agreement with VA to work on emerging safety 
issues, and some of the examples I have included in my written 
testimony where rapid analysis can be done of safety 
information that is available within the VA system either from 
the adverse event reporting system or from their MedSafe 
database.
    So this is a unique collaboration in terms of having access 
to electronic medical record data that VA is uniquely equipped 
to sort of amplify on safety issues that we may have a concern 
about, and it is also affecting the VA population.
    So specific studies are agreed upon where the study 
protocols that develop the hypotheses is developed, but the 
work is actually done within the VA system while the part about 
sharing of the information comes under the MOU, and the FDA may 
get information on the aggregate results. And there are 
specific examples like working on propoxyphene-containing 
products where the VA databases have been very helpful in 
informing the regulatory decisions pertaining to the actions 
the FDA took.
    Mr. Michaud. How does the FDA approve drugs? It is my 
understanding you have a committee that looks at drugs and 
makes a recommendation whether or not a drug should be approved 
by FDA. Or how does that process work?
    Dr. Iyasu. The approval process for new drugs is we have 
the NDA process for new drug applications. So the companies 
have to provide all of the information that has been collected 
over the development period, and this starts from the 
preclinical period and through the three stages of the clinical 
studies.
    And so all of the data are reviewed by FDA personnel, 
medical officers in all disciplines. And most of the decisions 
are based on whether there is adequate information to say that 
the drug is safe and effective for its intended use. And this 
is done by the collaboration of multiple disciplines, but the 
lead responsibility is by the Office of New Drugs, and mostly 
within the Center for Drug Evaluation and Research.
    So when data are very controversial in terms of the 
effectiveness data or the safety data that may be stemming from 
the clinical trials, we may seek, also, advice from outside 
experts. So we seek advice through the advisory committees that 
we have set up for different therapeutic areas.
    Mr. Michaud. My last question is, we do not deal with the 
FDA in this Committee, but I have heard complaints about FDA's 
progress for approving drugs and other issues that deal with 
conflicts of interest. I think a couple of years ago a drug--I 
think it was Prozac--was placed on the FDA approval list by the 
Committee. They have a lot of veterans who are very supportive 
of and encourage that; however, there is a concern about 
conflict of interest with a certain doctor within FDA.
    Recently I read an article dealing with the same issue with 
amalgams in mercury and the potential conflict of interest 
there as well. And when you look at prescription drugs, there 
is big money involved.
    How does FDA deal with complaints about conflict of 
interest within the FDA, or do you just brush them off?
    Dr. Iyasu. That is actually a good question. I am not an 
expert in that area of conflict of interest, but I would be 
very happy to take back the question and provide more detailed 
answers to your concern.
    Mr. Michaud. Thank you.
    [The FDA subsequently provided the information in a follow-
up letter, dated November 6, 2009, which appears on p. 68.]
    Mr. Michaud. Mr. Snyder.
    Mr. Snyder. Thank you, Mr. Chairman.
    I need you to educate me here. Ms. Finn, is this an 
inventory problem, or is it a recordkeeping problem of the--at 
the time drugs are prescribed? Where is the accuracy and the 
inaccuracy? When you go in and count up the number of drugs and 
pills in the storeroom, do we think that is accurate and that 
the recordkeeping was wrong, or do we think the recordkeeping 
is right, but somehow either too many pills were sent in, or 
some were walking out the door in-house? Which is the problem, 
or do you know?
    Ms. Finn. The problem is we can't tell which is actually 
accurate because the physical inventories are different from 
the records. We know there are problems with the transactional 
records, and we know there are problems with the actual taking 
and recording of the physical inventories.
    Mr. Snyder. Okay. The problem is on both ends.
    Now, if somebody had asked me, you know, an hour ago when I 
got to the airport do I think that somebody could make a phone 
call to a VA hospital pharmacy and say, you know, how many 
Lipitor 40 milligrams were prescribed last year, I would say, 
yeah, they can probably do that in an hour. But apparently that 
is not right. I thought because of the electronic 
recordkeeping, there would be an ability to come up with those 
numbers fairly quickly. Is that right or wrong?
    Ms. Finn. They may be able to give you an answer. I can't 
vouch for its accuracy.
    Mr. Snyder. So let us suppose it was inaccurate. Where 
would the inaccuracy come from? Prescriptions are written, and 
they never get sent to a patient?
    Ms. Finn. Part of the problem that we saw is the pharmacy 
may dispense pills using a reprint function which may not 
actually hit the pharmacy records, so there could be 
prescriptions dispensed that aren't being recorded because they 
are using an informal method.
    Mr. Snyder. Now, in terms of the inventory, you had quite a 
range of potential problems, right? Do we think at any time 
that this interferes with veterans getting medications? Because 
of the inaccuracies or inefficiencies, are sometimes veterans 
getting prescriptions, they are told by the pharmacist, well, 
this one isn't in, we didn't order it in a timely fashion, or 
not?
    Ms. Finn. No, sir. We didn't see any evidence of any harm 
to veterans because the pills were not available.
    Mr. Snyder. I don't mean harm. I just mean inconvenienced.
    Ms. Finn. No. None of that either.
    Mr. Snyder. So then it becomes an issue of cost.
    Ms. Finn. It becomes an issue of cost and accountability.
    Mr. Snyder. Thank you, Mr. Chairman.
    Mr. Michaud. Once again, I would like to thank the 
panelists. They have been very helpful. I look forward to 
working with you as we move forward trying to address some of 
the concerns that we have heard from the veterans community. So 
once again, I thank each of you for coming today.
    Our last panel is Mr. Valentino, who is the Chief 
Consultant over at the Department of Veterans Affairs. He is 
accompanied by Dr. Good and Dr. Tibbits.
    I want to thank all three of you for coming forward this 
afternoon. I look forward to your testimony.
    Mr. Valentino, without any further ado, I would open it up 
to you.

STATEMENT MICHAEL A. VALENTINO, R.PH., MHSA, CHIEF CONSULTANT, 
    PHARMACY BENEFITS MANAGEMENT SERVICES, VETERANS HEALTH 
     ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
  ACCOMPANIED BY CHESTER B. GOOD, M.D., MPH, CHAIR, VETERANS 
AFFAIRS MEDICAL ADVISORY PANEL, VETERANS HEALTH ADMINISTRATION 
 U.S. DEPARTMENT OF VETERANS AFFAIRS; AND PAUL TIBBITS, M.D., 
 DEPUTY CHIEF INFORMATION OFFICER FOR ENTERPRISE DEVELOPMENT, 
   OFFICE OF INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Valentino. Mr. Chairman, Ranking Member and Members of 
the Subcommittee, thank you for providing me this opportunity 
to discuss VA's Pharmacy Benefits Management Services program, 
including our national Formulary and patient safety 
initiatives.
    I am accompanied today by Dr. Chester B. Good, Chair of the 
Medical Advisory Panel, and Dr. Paul Tibbits, Deputy Chief 
Information Officer for Enterprise Development.
    Each veteran enrolled in the VA healthcare system is 
eligible to receive prescription medications, over-the-counter 
medications, and medical and surgical supplies under VA's 
comprehensive medical benefits package.
    In 2008, VA provided approximately 126 million outpatient 
prescriptions to more than 4.4 million veterans. I can say with 
confidence that VA is meeting the pharmaceutical needs of 
veterans, and that we are striving every day to provide even 
better care to more of America's heroes.
    I have some very good news to share. Just last Thursday, 
J.D. Powers and Associates, the widely recognized customer 
satisfaction and quality analysis firm, released the results of 
its third annual pharmacy customer satisfaction survey. This 
survey evaluated both community and mail-order pharmacies, 
including VA's consolidated mail outpatient pharmacies, or 
CMOPs. VA CMOP program ranked third overall for the mail-order 
pharmacy category, scoring 875 out of a possible 1,000 points. 
Only Kaiser Permanente at 877 points and Prescription Solutions 
at 876 points performed better than VA. All three organizations 
received the same overall ranking of ``among the best,'' the 
highest-ranking designation J.D. Powers and Associates offers. 
This is exceptional news, and we thank this Committee and 
Congress for making this success possible.
    VA's pharmacy benefits program works to enhance the 
clinical outcomes and improve the health of veterans through 
the appropriate use of pharmaceuticals. This program consists 
of six primary specialty areas: the Clinical Informatics 
section; CMOPs; adverse drug event reporting; Emergency 
Pharmacy Services; VA National Formulary management; and the VA 
Center for Medication Safety, or VA MedSafe. I will briefly 
explain how each of these programs provides better care to 
veterans.
    First, the Pharmacy Benefits Management (PBM) Clinical 
Informatics section provides operational oversight to the 
information systems used by PBM and all VA pharmacies. This 
section is responsible for developing the functional 
requirements for the Pharmacy Reengineering Project, which, 
when completed, will provide a system to enhance patient safety 
and encourage the appropriate use of pharmaceuticals by 
providing integrated, streamlined decision-making to clinical 
staff.
    Second, VA operates seven CMOPs that provide prescription 
fulfillment services to VA healthcare facilities. CMOPs support 
VA's healthcare mission through advanced automated production 
technologies to dispense and mail prescriptions to eligible 
veterans. This ensures each veteran receives his or her 
prescriptions in the most timely, accurate, and cost-effective 
manner as possible. Three out of five CMOP performance metrics 
currently exceed six sigma performance.
    Third, by collecting and evaluating adverse drug events 
through VA's Adverse Drug Event Reporting System, VA is able to 
identify drug safety signals, assess significance of external 
drug safety issues in our own patients, and track trends of 
known drug safety issues almost instantaneously. This process 
is facilitated by VA's electronic medical record, which links 
prescription data to clinical outcomes at the patient level.
    Fourth, the Emergency Pharmacy Services section is 
responsible for procuring, storing, and maintaining emergency 
pharmaceutical and medical or surgical supply items for the 
Department. This section works closely with other groups within 
VA to ensure we are ready to respond to an emergency with 
supplies at VA Medical Center storage sites nationwide. VA can 
also deploy mobile pharmacies to provide targeted local 
support.
    Fifth, VA's National Formulary was consolidated into a 
single formulary in 2009. VA experts monitor the medical 
literature, scientific research and VA outcomes data to 
identify evidence that may support adding drugs to or deleting 
drugs from the formulary, and by drafting evidence-based 
prescribing guidance. VA develops guidance on the pharmacologic 
management of common and high-cost diseases and collaborates 
with clinical experts within the Department to develop or 
refine guidance when necessary.
    Finally, VA MedSafe is a national comprehensive 
pharmacovigilance program that emphasizes the safe and 
appropriate use of medications. VA strives to ensure that 
veterans receive the right medications in the right dose at the 
right time. VA is frequently cited as a leader in the field of 
pharmacovigilance by some of the leading experts in the field, 
and currently has a formal collaboration agreement with the 
Food and Drug Administration and the Department of Defense in 
this important area.
    Mr. Chairman, VA has developed a remarkable pharmacy 
benefits management system that provides veterans safe and 
effective medication to improve their healthcare. Our National 
Formulary is based on the best clinical research and leverages 
the size of our patient population and the Department to 
procure medications at a low cost.
    Thank you again for this opportunity to testify, and my 
colleagues and I are prepared to answer your questions.
    Mr. Michaud. Thank you very much, Mr. Valentino. I 
appreciate your coming here today.
    [The prepared statement of Mr. Valentino appears on p. 61.]
    Mr. Michaud. You sat through the first panel and the second 
panel, and you heard some of the concerns raised by both 
panels. And one of the concerns is the fact that formulary 
decisions are not conducted in a transparent process, they are 
made behind closed doors. With the administration's commitment 
to transparency, what are your comments on how you can make the 
process more transparent? Are you familiar with the DoD 
process? What is wrong with having the same system as the DoD 
that is transparent compared to the VA system?
    Mr. Valentino. I am familiar with the DoD process.
    We do have a fair amount of transparency in our process. We 
develop our evidence-based documents, literature reviews, drug 
class reviews. We vet them internally. Everyone has a bite at 
the apple in VA, frontline clinicians, physician managers. We 
send them out far and wide for comment before we finalize those 
documents which ultimately are posted on our Web site and then 
are accessible by the public for further comment and feedback.
    We use VA physicians and VA pharmacists to manage the 
formulary process. Cost is really not considered until the very 
end of the process. We spend a lot of time focusing on safety 
primarily and efficacy of the products that we review. Cost is 
certainly a consideration, but it is only considered at the 
very end and certainly does not trump safety and efficacy.
    In regards to getting input, there are a lot of meetings 
that are held at the local and regional level with veteran 
service organizations regarding the formulary. I think there is 
a lot of collaboration and a lot of communication that takes 
place at that level which does filter up to our level.
    So we are always ready to receive comments, to work with 
folks about the formulary issues. We don't seem to get that 
many comments about the decisions that we have made. As Dr. 
Hoadley testified, our physicians seem to be fairly happy with 
the process and their access to nonformulary drugs. If we 
believe that J.D. Powers survey, our patients appear to be 
pretty happy as well. VA pharmacy usually scores pretty high in 
our internal customer surveys, so we believe we do have a 
fairly open process.
    Mr. Michaud. Do you think the reason why you don't get very 
many comments, from what I heard from earlier panels, is 
because it is a secretive process? I don't know the DoD 
formulary process, but would you be opposed to having VA go 
through that same process, because that appears to be more 
transparent than what VA is going through. If not, what are 
your objections to the DoD process?
    Mr. Valentino. I have not studied the DoD process in 
detail. I know they have a Beneficiary Advisory Panel that is 
advised of the decisions after the executive committee makes 
their decisions.
    I would be very happy to consider such a proposal for VA.
    Mr. Michaud. When you look at what our soldiers are 
currently going through today in Iraq and Afghanistan, TBI. We 
heard from Mr. Weidman earlier that seizure medications are not 
part of the formulary. I find that astonishing since this is a 
signature wound of the war in Iraq and Afghanistan. Is that 
correct, and if so, why wouldn't that be on the formulary since 
we are hearing so much about TBI and post-traumatic stress 
disorder?
    Mr. Valentino. We do have a large number of seizure 
medications on the formulary. We review all new drugs as they 
are approved by the FDA. Frequently it takes a little bit of 
time before we get published information in the literature so 
we can make a better assessment of the safety and efficacy. But 
we do--I believe that we do have a very good selection of drugs 
for seizures on our formulary currently; and importantly, if we 
don't have one that somebody needs, it is available through the 
nonformulary process. Our policy requires that we adjudicate 
those nonformulary requests within 96 hours. And we have our 
various sites report that information to us quarterly. So we do 
have a fairly rapid way of doing that.
    Our policy also says if you need the drug urgently, the 
time period to get it is immediately. We don't rely on the 96 
hours. So typically that would occur in the inpatient setting. 
But for out-patient drugs where someone needs to switch from 
one drug to another, that typically happens rather quickly.
    I would ask my colleague to comment further on the 
antiseizure medications.
    Dr. Good. I think also was mentioned atypical 
antipsychotics, that they weren't on the formulary, and I 
believe most of the atypical antipsychotics are on the 
formulary and are used in these patients with TBI. And we have 
a wide variety of antiseizure medications.
    Mr. Michaud. I believe in Mr. Weidman's testimony, though, 
he mentioned how difficult it is to get drugs off the 
formulary. That is a big concern that I have, plus the fact 
that there are a lot more drugs on the DoD formulary. For 
instance, you may have a soldier at Walter Reed who is on 
medication, on drugs that are not on the VA formulary, then 
they get transferred over to the VA system. Have you run into 
problems in that particular area as well?
    Mr. Valentino. Early on we heard of some issues with 
veterans who are on convalescent leave. They are still on 
Active Duty, and they were receiving care at a VA close to 
their residence. They were coming to us on very sophisticated 
pain medications that were given by a pump with special tubing, 
special concentrations of medications. It did take us just a 
small bit of time to become accustomed to that equipment, get 
the necessary supplies in.
    At that time we did communicate with the field, and we 
advised them that patients who fit into this category, they are 
on convalescent leave; they are just getting their care at the 
VA; they need to get whatever they are on regardless of whether 
it is on the formulary or not on the formulary, no questions 
asked. And I have not heard of any problems in that area since 
that time.
    Mr. Michaud. Mr. Perriello?
    Mr. Periello. Thank you, Mr. Chairman.
    Congratulations on the J.D. Powers and Associates ranking, 
and I think there are some signs of progress and success that 
are encouraging, but also obviously some concerns. One of 
particular interest to my heavily rural district is access to 
care. I wanted to hear a little more about the policy rationale 
for the VA not filling prescriptions by non-VA doctors and what 
some of the rules are for that. This is especially burdensome 
for rural veterans who have to travel a long way to get these 
prescriptions signed.
    Mr. Valentino. Thank you.
    There are a small number of prescriptions that we can fill 
for--written by non-VA doctors, the CHAMPVA program is one 
example, Aid and Attendance is another example, fee basis is 
another example. But by and large, it has to do with the makeup 
of our process.
    As Dr. Hoadley testified, we offer a prescription benefit 
as part of an integrated comprehensive medical care model. Our 
prescription benefit is not an add-on, it is not a stand-alone 
program, and that is a clear difference between some other 
programs where you can just send in your prescriptions. We 
believe that to do so, to provide prescriptions in that manner, 
would possibly compromise the quality of care, because we don't 
have the complete picture in regards to what that patient might 
be getting from various sources; not just from our pharmacies, 
but from other pharmacies.
    We do have programs with some of our contracted CBOCs in 
the rural areas so that patients can get their prescriptions 
filled at a community pharmacy under contract at VA expense, 
and then refills are sent to them via mail through our 
Consolidated Mail Outpatient Pharmacy program.
    Mr. Periello. Is there room to expand on any of those or 
otherwise improve? I mean, while protecting the quality of care 
arguments and wanting the comprehensive sense of a medical home 
and all of the factors for a VA patient, isn't there something 
between where we are now and those concerns where we could see 
greater expansion of non-VA filling of prescriptions and the 
like?
    Mr. Valentino. I am sure anything is possible. We did have 
a program for a few years called the Transitional Pharmacy 
Benefit Program, and it was designed to ease the out-of-pocket 
cost for patients who were waiting more than 30 days for their 
initial primary care appointment. We found that it was 
extremely difficult to administer our program under that model 
because of the unfamiliarity of the prescribers with our 
formulary. We also found that the number of eligible patients 
who could participate as compared to those who actually did 
participate was low. In other words, not very many people took 
advantage of that program.
    So to answer your question, yes, I think that there are 
lots of alternatives that we could consider.
    Mr. Periello. Are there particular barriers to doing it 
that are ones where we would need to be involved, or is this a 
matter of piloting some of these potential other ideas?
    Mr. Valentino. Well, one of the big issues has to do with 
the electronic medical records. That is really a huge safety 
tool for us. Our prescribers are able to order medications 
electronically. They are reviewed by a pharmacist. We check to 
make sure the right dose is there, that the patient isn't on 
other medications.
    So if we were to start to fill a lot of prescriptions from 
non-VA providers, we would lose that important safety 
mechanism. That would cause us concern over the safety of the 
product that we are dispensing. In other words, is it the right 
drug for that person, is it going to interfere with other drugs 
that he may be getting?
    Mr. Michaud. Thank you very much, Mr. Perriello, and also 
for your leadership on veterans issues. We really appreciate 
your tenacity in making sure we take care of our veterans. So 
thank you.
    Just a couple more questions, Mr. Valentino.
    I don't know if you had a chance to read the Inspector 
General's report issued in June of 2009, the audit report. What 
steps has the VA taken to address the issue that was addressed 
in that report regarding the noncontrolled drugs and the CMOP 
contract?
    Mr. Valentino. We looked at each of the six 
recommendations. We concurred with the recommendations. We have 
drafted a policy regarding the inventory controls over 
noncontrolled medications. We have communicated our 
expectations verbally on a number of conference calls, a number 
of e-mail bulletins that we sent out. So we have told people 
what we want them to do.
    We have developed a policy that is currently under review 
in the concurrence process. That is, our short-term or our 
interim solution is to just try to do more education, try to 
develop the policy. We also are working with the network office 
to have the System-wide Ongoing Assessment and Review Strategy 
(SOARS) teams that go out and do assessments and take a look at 
this particular area, make sure all of the policies are being 
followed.
    Our long-term solution has to do with the pharmacy 
reengineering effort and some of the requirements that we have 
developed for inventory management.
    So that is really where we think we are going to make the 
most gains. We have a lot of remote dispensing cabinets within 
VA. We want to be able to get the inventories in those cabinets 
rolled up along with the outpatient inventories, the 
intravenous inventories, the unit dose inventories, into a 
single place, and that will give us the ability then to match 
what we purchase with what we dispense.
    And as we heard earlier, you really need to monitor 
everything basically. You need to have a perpetual inventory 
system if you want to have more confidence in the process.
    Mr. Michaud. You heard Dr. Lichtenberg's testimony, in 
which he explained that older drugs on the VA formulary result 
in shorter lives for our veterans. Any comment on that?
    Mr. Valentino. Yes, I do have some comments. And if I may, 
I have a couple of posters that I would like to share that 
helps illustrate that.
    This is a graph from the report that was mentioned, and it 
shows the veteran's life expectancy versus life expectancy at 
birth of all U.S. males. And when you look, everybody I have 
showed this to says, Oh, my word, veterans are not living as 
long as their counterparts. Well, there are a couple of 
problems with that.
    You will notice there are two Y axes here. So we have 
corrected this chart to show what it would actually look like 
if you put everything on the same axis.
    I would also point out that the veterans used in this study 
are all U.S. veterans; not veterans that get care at VA, not 
veterans that are enrolled in VA, all veterans. So we have some 
concerns.
    This is actually what we believe is the true picture. In 
fact, veterans--and again, these are not veterans that receive 
care in VA. This is the same data. They actually live longer 
than their counterparts. So I wanted to show this to illustrate 
some of the concerns that we have with the report.
    There are a number of issues. We have not had a 1-year 
moratorium on drugs since 2000. And also, as Dr. Hoadley 
pointed out, formulary status does not imply access. We have a 
large number of drugs that we dispense on a nonformulary basis. 
I ran a list of drugs where we have more than 100,000 30-day 
equivalent prescriptions. Looked at a 12-month period, we 
filled almost 9 million nonformulary, 30-day prescriptions. 
That is out of 237 million 30-day equivalent prescriptions. So 
roughly 4 percent of our utilization is for nonformulary drugs, 
and that represents about 9 percent of our total cost. So 
formulary status does not equal access.
    Our nonformulary status is very similar to prior 
authorization or step therapy that you see on other formularies 
where these drugs are in the second or third tiers.
    There are also drugs listed as examples in the report that 
were withdrawn from the market for safety reasons prior to the 
report being written. There are also drugs listed that were 
listed as nonformulary that were on formulary.
    So we do not agree with the conclusions in the paper 
whatsoever.
    Mr. Michaud. The VVA actually came up with several 
recommendations in their testimony. I do not know if you had a 
chance to review those recommendations. If so, would you care 
to tell the Committee whether you agree or disagree, and, if 
you disagree, why? And if you can't do it today----
    Mr. Valentino. A couple of points.
    We certainly appreciate the comments, and we truly are 
interested in anything that can make our system better.
    A couple of points that I would point out is regarding the 
diabetes care, actually in VA diabetes care is very, very good. 
There are some articles by Kerr that point out that VA care is 
cost-effective and high-quality as compared to other systems.
    The only other thing that I would point out is that we do 
have some performance metrics, as was mentioned, that are 
pharmacy related. So we have got performance metrics on 
diabetes; we have got performance metrics on cholesterol, on 
hypertension, and in these, when compared to Medicare, 
Medicaid, and private programs, VA is often the leader in those 
areas. So we do believe in performance metrics. We absolutely 
agree that people will perform when you ask them to do 
something and they know they are measuring it.
    The other point is that in regards to the cholinesterase 
inhibitors, which is the primary drug class used for dementia, 
Alzheimer's, we currently have two of the three drugs available 
on the National Formulary, and as with all drugs, if the third 
one is needed, is medically necessary, there is a process to go 
through to obtain that.
    One example that I think is really--really illustrates 
quite nicely how cost can be a factor or cannot be a factor is 
drug treatments for wet AMD, and this is a condition where the 
macula in the eye--I should probably let Bernie talk about it. 
You get a proliferation of blood vessels, and it causes you not 
to be able to see. There are some anticancer drugs that work 
very well. One is approved by the FDA for this indication, very 
expensive; the other is not approved by the FDA for this 
indication, but seems to work well, seems to be safe. It is 
pennies compared to thousands.
    In VA we have made the decision that we are going to go 
with the FDA drug which costs--go ahead. You talk about it.
    Dr. Good. The drug is FDA-approved for treatment of macular 
degeneration, which is a leading cause of blindness in the 
elderly.
    So we made the decision because evidence--the evidence 
supported use of Lucentis, and even though we were getting 
calls to use Avastin instead, because it was quite a bit 
cheaper, because the evidence supported--in the literature 
supported--and that is our approach, to live and die by the 
evidence, what we think will best help the veteran. And in this 
case we thought that by far the more expensive drug for the 
same indication was what was in the best interest of the 
veteran.
    So this decision made several years ago, which stands 
today, was to mandate use of Lucentis rather than the far, far 
cheaper Avastin.
    Mr. Michaud. My very last question. Why did the VA allow 
the directive on drug accountability software to lapse in 2003?
    Mr. Valentino. We have incorporated a lot of our directives 
into handbooks that are based on themes, National Formulary 
handbooks, different kinds of handbooks.
    We looked at that particular requirement, and we found that 
although it may seem like it really adds to the security, in 
fact all it does is tell you about those drugs that you are 
looking at, as we heard from the OIG. If folks tend to know 
where you are looking, they go other places.
    So we had fully anticipated that we would have the 
perpetual inventory process in place by now, And so we didn't 
feel that that requirement should be continued in policy.
    Mr. Michaud. Thank you.
    Any additional questions?
    Once again, Mr. Valentino, I want to thank you and Dr. 
Tibbits and Dr. Good for coming today, as well as the previous 
two panels with us. It has been very helpful, and we really 
appreciate it and look forward to working with you to try to 
address some of the concerns that I heard.
    We will adjourn the Subcommittee hearing.
    [Whereupon, at 3:45 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

             Prepared Statement of Hon. Michael H. Michaud,
                    Chairman, Subcommittee on Health
    The Subcommittee on Health will now come to order. I would like to 
thank everyone for attending this hearing.
    The goal of today's hearing is to determine whether the VA is 
meeting the pharmaceutical needs of our veterans. We are conducting 
this hearing because of the concerns that I have heard from our 
veterans about proper access to non-formulary prescription drugs, 
concerns about adverse drug interactions and patient safety, and recent 
reports by the Office of Inspector General citing the need to better 
manage certain aspects of the VA's pharmacy benefits program.
    When properly designed and implemented, formularies can promote 
drug therapy that is rational, clinically appropriate, safe, and cost-
effective. However, patient care may be compromised if a formulary 
system is not developed and administered so that individuals can access 
the drugs that they need. I have heard from veterans who have voiced 
their frustration with the VA national formulary as being too 
restrictive to the point that accessing appropriate drugs is a barrier. 
Some veterans have pointed to a flawed, subjective system for securing 
non-formulary drugs. For example, a veteran who is denied access to a 
non-formulary drug at one VA medical center may be approved in another 
medical center, which suggests that the decision may not be based 
entirely on clinical factors.
    I also have concerns about patient safety and whether we are doing 
enough to prevent adverse drug events. Among the medication errors 
leading to adverse drug events are missed doses, duplicate therapy, 
drug to drug interaction, inadequate monitoring, and preparation error. 
For example, what is the VA doing to prevent adverse drug events and 
are they coordinating well with the FDA? What steps is the VA taking to 
ensure that veterans do not accidentally take their prescribed medicine 
in wrong doses or do not forget to take their medicine at the right 
times? Also, how does the VA make sure that they catch potentially 
adverse drug interactions when veterans get their prescriptions filled 
both at the VA and at private pharmacies?
    Finally, the recently released audit reports from the Office of 
Inspector General raise concerns about the VA's management of non-
controlled drugs and the Consolidated Mail Outpatient Pharmacy (CMOP) 
contract. Efficient management of the CMOP contract is critical because 
almost 80 percent of all VA pharmaceuticals are dispensed using the 
CMOP.
    We have our panels of expert witnesses to help us explore these 
issues today. I look forward to hearing their testimonies.

                                 
     Prepared Statement of Jack Hoadley, Ph.D., Research Professor,
     Health Policy Institute, Georgetown University, Washington, DC
    Good morning Mr. Chairman and Members of the Subcommittee. My name 
is Jack Hoadley, and I am a Research Professor at Georgetown 
University's Health Policy Institute. As a long-time analyst of issues 
surrounding prescription drug coverage, I have conducted a variety of 
research projects with regard to formularies and other approaches to 
managing the use of prescription drugs in Medicare, Medicaid, the VA, 
and private-sector health plans. I appreciate the opportunity to speak 
to the Subcommittee on these important issues.
    During congressional debates over the Medicare Part D prescription 
drug benefit, the role of the VA National Formulary has been commonly 
invoked. Some have pointed to the role of the VA Formulary in helping 
to achieve low prices for the VA, whereas others have made the claim 
that access to drugs is more restricted in the VA system compared to 
private plans, especially the private plans offering drug coverage 
through Medicare Part D.
    A report prepared in December 2006 for the Pharmaceutical Research 
and Manufacturers of America (PhRMA) concluded that ``the application 
of a VA-style formulary process to the Medicare prescription drug 
program would significantly reduce physician and patient choice of 
drugs,'' and that ``a reduction in choice of prescription drugs could 
be of special concern for the Medicare population.''\1\ In an April 
2007 memo, Greg D'Angelo of the Heritage Foundation wrote that ``if 
Congress fixes prices in Medicare and establishes a restrictive 
national formulary, the program would be less responsive to the diverse 
and ever-changing needs of beneficiaries.''\2\ As a result of those 
statements, my colleagues and I decided to shed further light on these 
issues by conducting an objective comparison of the VA National 
Formulary to formularies used by Part D plans.
---------------------------------------------------------------------------
    \1\ ``Comparison of Compounds on the Formularies of Medicare 
Prescription Drug Plans (PDPs) and the Department of Veterans Affairs 
Veterans Health Administration (VA) National and Regional 
Formularies,'' prepared for the Pharmaceutical Research and 
Manufacturers of America by Covance Market Access Services Inc., 
December 2006.
    \2\ Greg D'Angelo, ``The VA Drug Pricing Model,'' The Heritage 
Foundation, 11 April 2007.
---------------------------------------------------------------------------
    We examined a sample of 160 commonly prescribed drugs and compared 
their status on the VA National Formulary to comparable unrestricted 
coverage for a variety of Medicare Part D plans. In general, we found 
that the VA listed fewer drugs on formulary, but our analysis of off-
formulary prescribing at the VA suggests that this does not translate 
into less access to the drugs than exists under Medicare Part D.
Background
    Formularies were used by veterans' medical centers as early as 1955 
to help manage pharmacy inventories. In 1995, the VA took steps to 
consolidate its bargaining power with drug makers and thus reduce 
spending. It combined the formularies of local VA medical centers to 
create a single formulary in each of 21 Veterans Integrated Service 
Networks (VISNs). Two years later, it implemented a national formulary, 
and by 2007 the VA had completed the process of phasing out the VISN 
drug lists, making the national formulary the definitive and only VA 
drug list.\3\
---------------------------------------------------------------------------
    \3\ GAO, ``VA Drug Formulary: Better Oversight is Required, but 
Veterans Are Getting Needed Drugs,'' Report to the Ranking Member, 
Senate Committee on Veteran's Affairs, January 2001. Donna Young, 
``VA's 10-Year Journey to One Formulary Concludes,'' American Journal 
of Health-System Pharmacy, 64 (15 March 2007): 578-580.
---------------------------------------------------------------------------
    The VA National Formulary functions somewhat differently than most 
formularies maintained by private organizations. Since the VA is an 
integrated system - meaning that veterans go to VA facilities to see VA 
doctors and fill prescriptions at a VA formulary - the VA has a great 
deal of leverage to promote the use of a single formulary within its 
facilities and patient pool. This distinguishes the VA formulary from 
those used by most private insurers. In most private plans, a drug's 
formulary status might not be known by a physician when a prescription 
is written, but instead only determined at the point of sale by the 
pharmacist, when the patient brings a prescription to be filled at the 
local pharmacy. In those cases, the prescribing physician has no 
particular relationship with the insurer or health plan. The VA system 
is more like group and staff model HMOs such as Kaiser Permanente, 
where the formulary is viewed as a clinical tool to be used by 
physicians, rather than an enforcement tool of the plan applied at the 
pharmacy.
    The VA National Formulary is managed by practicing VA physicians 
and regional formulary managers and takes into account safety, 
efficacy, and cost in deciding what drugs to list on the formulary. As 
part of the process, VA clinicians have an opportunity to provide input 
on the decisions, which helps to create a sense of buy-in for them. In 
addition, VA physicians and pharmacists prepare comprehensive written 
reviews that summarize recent published research on the safety and 
efficacy of drugs in specific drug classes. These reviews may be used 
to make recommendations on a drug's status within the formulary. For 
example, a 2003 review of oral bisphosphonates (typically used to treat 
osteoporosis) concluded that since Fosamax and Actonel ``produce 
similar results . . . the VHA should consider these two drugs 
equivalent clinically, and choose one for use based on best value.''\4\
---------------------------------------------------------------------------
    \4\ Marc C. Geraci, ``Drug Class Review Oral Bisphosphonates in the 
Treatment of Osteoporosis,'' VHA Pharmacy Benefits Management Strategic 
Health care Group and the Medical Advisory Panel, September 2003.
---------------------------------------------------------------------------
    The VA considers some classes ``closed,'' that is, drugs in that 
class are only covered if they are listed on the formulary. Generally, 
only a few drugs in a ``closed'' class are listed on the national 
formulary. The VA justifies the exclusion of others on the grounds that 
they are therapeutically interchangeable - ``equivalent in terms of 
efficacy, safety and outcomes'' - to the drugs on the formulary. The VA 
can then obtain lower prices for on-formulary drugs through competitive 
contracts by committing to use them whenever clinically appropriate.\5\ 
Most often, these are classes where multiple brand-name drugs are 
available, but few or no generic alternatives. Drugs in other classes 
may have restrictions, meaning that physicians are encouraged to 
prescribe certain ``preferred'' drugs in that class over others.\6\ 
Such restrictions are used both to create leverage in negotiating 
prices and to restrict inappropriate use of certain drugs.
---------------------------------------------------------------------------
    \5\ GAO, ``VA Drug Formulary: Better Oversight is Required, but 
Veterans Are Getting Needed Drugs.''
    \6\ Institute of Medicine, Description and Analysis of the VA 
National Formulary (Washington: National Academic Press, June 2000).
---------------------------------------------------------------------------
    According to the VHA, drugs not listed on the national formulary 
may be prescribed through a non-formulary request process designed to 
ensure timely, evidence-based decisions. Non-formulary drugs may be 
approved for use by a patient if:
     1.  Formulary agents are contraindicated;
     2.  Formulary agents have caused adverse reactions;
     3.  All formulary alternatives have demonstrated therapeutic 
failure;
     4.  No formulary alternative exists; or
     5.  ``The patient has previously responded to a non-formulary 
agent and risk is associated with a change to a formulary agent.''

    Through this process, drugs not listed on the VA formulary can be 
prescribed. An informal survey by the VA pharmacy benefit manager in 
1998 found that ``88 percent of waiver requests [for non-formulary 
medications] were approved.''\7\ Nevertheless, VA formulary compliance 
is very high. The VA estimates that overall use of drugs not on the 
formulary is about 5 percent. This high compliance, especially for the 
closed classes, is aided by the sense of buy-in by VA clinicians and 
the reliance on clinical evidence as a key component of the decision-
making process. Adherence for a closed class sometimes reaches 90 
percent within 3 months of a formulary change and over 98 percent 
within 6 months.\8\
---------------------------------------------------------------------------
    \7\ IOM, Description and Analysis of the VA National Formulary.
    \8\ Michael Valentino, ``Overview of the VA Pharmacy Benefits 
Management Strategic Health Care Group (PBM),'' presentation to the 
American Enterprise Institute, 19 January 2007.
---------------------------------------------------------------------------
    Several studies over the past decade have asked whether the VA 
National Formulary too strictly limits the prescription drugs available 
to veterans. After a 1999 report by the House Committee on 
Appropriations raised such concerns, a mandated report by the Institute 
of Medicine, released in 2000, concluded that ``the VA National 
Formulary is not overly restrictive, and the limited available evidence 
suggests that it has probably meaningfully reduced drug expenditures 
without demonstrable adverse effects on quality.'' The reviewers also 
found, however, that the National Formulary lacked ``essential systems 
to assure that new drugs are expeditiously reviewed'' and that more 
needed to be done to ensure ``that a responsive process for assuring 
access to medically necessary exceptions to the formulary is 
consistently in place.''\9\
---------------------------------------------------------------------------
    \9\ IOM, Description and Analysis of the VA National Formulary.
---------------------------------------------------------------------------
    In 1999 and 2000, the VA commissioned two independent surveys of VA 
prescribers' perceptions of the VA National Formulary. The first survey 
identified a subset of physicians who believed this formulary was more 
restrictive than most in the private sector or that it impinged on 
providing quality care to their patients. But nearly two-thirds thought 
they were able to prescribe needed drugs and that their patients could 
obtain nonformulary drugs when needed.\10\ Respondents to the second 
survey also indicated general satisfaction with the formulary and 
agreed that it was important for containing costs and ensuring good 
value. Although they reported that roughly 90 percent of waiver 
requests for off-formulary drugs were approved, about one-third of the 
physicians indicated that approvals took 3 days or longer.\11\ In 2001 
the Government Accountability Office told the Congress that 
``prescribers reported that the national formulary generally contains 
the drugs their patients need or, when necessary, prescribers can 
usually get non-formulary drugs.''\12\
---------------------------------------------------------------------------
    \10\ Peter A. Glassman et al., ``Physician Perceptions of a 
National Formulary,'' American Journal of Managed Care 7:3 (March 
2001), pp. 241-251.
    \11\ Peter A. Glassman et al., ``Physician Satisfaction with 
Formulary Policies: Is It Access to Formulary or Nonformulary Drugs 
that Matters Most?'' American Journal of Managed Care 10:3 (March 
2004), pp. 209-216.
    \12\ ``VA Drug Formulary: Better Oversight is Required, but 
Veterans are Getting Needed Drugs.''
---------------------------------------------------------------------------
    In a 2005 report, economist Frank Lichtenberg concluded that the VA 
was tardy in its addition of newly FDA-approved drugs to the VHA 
formulary, and noted ``that only 19 percent of the drugs approved since 
2000 were on the VHA formulary.''\13\ Lichtenberg attributed the use of 
older drugs in the VA formulary to a reduction in veterans' mean age of 
death, by 2.04 months. But Lichtenberg's report was rebutted by the 
VA's Michael Valentino in a 2007 presentation.\14\ He offered evidence 
that veterans experienced greater life expectancies at birth than other 
populations. Arguing that ``newer is not always better,'' he pointed 
out that ``many `new' drugs are actually `me too' drugs'' that are 
essentially the same as - and not necessarily more effective than - 
treatments already on the market. Valentino also noted that 23 new 
drugs (including some that Lichtenberg lists as not covered by the VA) 
were taken off the market for safety reasons between 1980 and 2005, and 
concluded, ``what is the rationale for exposing patients to drugs with 
unknown risks, when there is little or no clinical advantage?'' 
Valentino insisted that the ``VA reviews all new molecular entities for 
consideration for national formulary listing in a timely fashion,'' and 
that it based its decisions on cost and efficacy data.
---------------------------------------------------------------------------
    \13\ Frank R. Lichtenberg, ``Older Drugs, Shorter Lives? An 
Examination of the Health Effects of the Veterans Health Administration 
Formulary,'' Center for Medical Progress at the Manhattan Institute, 
October 2005.
    \14\ Michael Valentino, ``Overview of the VA Pharmacy Benefits 
Management Strategic Health Care Group.''
---------------------------------------------------------------------------
Comparing VA and Medicare Part D Plan Formularies
    To compare the VA National Formulary with those offered by the 
Medicare Part D prescription drug plans, my colleagues and I focused on 
a pre-selected sample of 160 drugs representing more than half the 
prescription volume for Medicare beneficiaries. The sample includes all 
drugs in 14 drug classes, as well as other commonly prescribed drugs, 
and has nearly equal numbers of generic (n=76) and brand-name (n=84) 
medications.\15\ For Medicare, our analysis covers 47 standalone 
prescription drug plans offered on a national or near-national basis in 
2007, as well as two formularies offered in different regions by a 
group model HMO participating in the Medicare Advantage program. We 
considered the number of plans that listed a drug, whether the drug was 
placed on a generic, preferred, or specialty tier, and whether the drug 
was restricted through any utilization management tools (prior 
authorization, step therapy, or quantity limits). For the VA, the 
analysis considered whether a drug was listed on formulary and the 
yearly volume of prescriptions written for that drug.\16\
---------------------------------------------------------------------------
    \15\ For more details on our sample of drugs, see Jack Hoadley et 
al., ``An In-Depth Examination of Formularies and Other Features of 
Medicare Drug Plans,'' Henry J. Kaiser Family Foundation, April 2006, 
and Jack Hoadley et al., ``Benefit Design and Formularies of Medicare 
Drug Plans: A Comparison of 2006 and 2007 Offerings - A First Look,'' 
Henry J. Kaiser Family Foundation, November 2006.
    \16\ Data on whether a drug is on the VA National Formulary and its 
restrictions were obtained from the VA's Web site (January 2007 
version). Information on the prescription volume was provided to the 
authors by the VA. The VA's formulary lists all drugs by chemical name; 
thus we assumed that when both a generic and a brand-name version of a 
particular chemical exist, only the generic version is listed.
---------------------------------------------------------------------------
    A simple count of the 160 sample drugs on the VA formulary suggests 
that it lists fewer drugs (82 drugs) than any of the national or near-
national Part D plans (median number of drugs listed = 136; minimum = 
99). However, there are key reasons that make this simple accounting 
misleading. First, veterans have unrestricted access to all drugs 
listed on the VA formulary and access to additional drugs if they seek 
authorization. By contrast, Part D plans include drugs on their 
formularies that may only be available to beneficiaries subject to 
utilization restrictions, such as prior authorization, step therapy, or 
quantity limits. In the VA system, patients only need to seek prior 
authorization or undergo step therapy for drugs not listed on the VA 
National Formulary.
    The TNF Inhibitor class, which includes three expensive specialty 
drugs primarily used for treating rheumatoid arthritis (Enbrel, Humira, 
and Remicade), illustrates this dynamic. Neither the VA nor the median 
Part D plan covers any of these drugs outright. In the VA, the drugs 
are considered off formulary, but they are available when patients or 
their doctors request authorization. Most Medicare drug plans list 
these three drugs on formulary, but require prior authorization before 
the drug is actually covered. In these two situations, patients face a 
similar level of restricted access, but the formulary status is 
different.
    Second, many Part D plans list drugs on a ``non-preferred'' tier 
with a higher level of cost sharing. This system creates a financial 
incentive for beneficiaries to adhere to their plan's formulary, even 
when their doctor may not know which drugs are preferred or not 
preferred. By contrast, the VA does not use tiers; cost sharing for any 
drug is limited to $8 for a month's supply for those patients subject 
to the copayment. Because VA doctors use only the VA formulary, they 
can become familiar with its coverage; financial incentives are not 
needed to steer use.
    Because of these system differences, it is most relevant to compare 
the VA's formulary to the list of drugs that are on a preferred tier in 
a Part D plan's formulary, without designations for either prior 
authorization or step therapy.\17\ For the national and near-national 
plans, the median number of unrestricted on-formulary drugs is 104, 
compared to 136 when restricted drugs are included. By this criterion 
the typical Medicare plan formulary comes closer to the 82 drugs listed 
on the VA National Formulary (Table 1).
---------------------------------------------------------------------------
    \17\ When a drug has a quantity limit, we do not treat that as a 
restriction. Some plans designate large numbers of drugs with quantity 
limits, apparently to restrict the dispensing of prescriptions of more 
than 30 days.

  Table 1. Number of Drugs with Unrestricted Coverage, VA Formulary and
                      Selected Medicare Plans, 2007
------------------------------------------------------------------------
                                                                 Brand
                                    All Drugs      Generic       Drugs
                                     (N=160)    Drugs (N=76)    (N=84)
------------------------------------------------------------------------
On VA Formulary                     82           56            26
------------------------------------------------------------------------
Median, 47 national Part D plans   104*          72            37
------------------------------------------------------------------------
  Minimum, 47 national Part D       80*          48            20
 plans
------------------------------------------------------------------------
  Maximum, 47 national Part D       149          76            73
 plans
------------------------------------------------------------------------
Top 10 Part D plans, by 2006
 enrollment
------------------------------------------------------------------------
  AARP Medicare Rx Basic           112           75            37
------------------------------------------------------------------------
  Community Care Rx Basic           98           70            28
------------------------------------------------------------------------
  Humana/Complete                  121           76            45
------------------------------------------------------------------------
  Humana/Enhanced                  121           76            45
------------------------------------------------------------------------
  Humana/Standard                  149           76            73
------------------------------------------------------------------------
  Medicare RX Rewards Value        117           76            41
------------------------------------------------------------------------
  Prescription Pathway Bronze      118           74            44
------------------------------------------------------------------------
  Silverscript (Caremark)          102           63            39
------------------------------------------------------------------------
  United Healthcare Rx Basic        97           73            24
------------------------------------------------------------------------
  Wellcare/Signature                94           74            20
------------------------------------------------------------------------
Group Model Medicare Advantage
 Plans
------------------------------------------------------------------------
  Kaiser Permanente, Northern       77           45            32
 California
------------------------------------------------------------------------
  Kaiser Permanente, Southern       79           50            29
 California
------------------------------------------------------------------------
* Median and minimum for ``all drugs'' are measured directly and not the
  sum of the brands and generics values.
* Note: Unrestricted coverage is defined as coverage on a preferred tier
  with no prior authorization or step therapy requirements.

    One view of the difference between the VA's formulary and those 
used by Part D plans is how they treat the generic drugs in our sample 
(Table 1). The typical Part D plan lists over 90 percent of generic 
drugs, and several of the ten most popular plans list all of the 
generics we studied. By contrast, the VA lists only 56 of 76 sample 
generic drugs. This reflects the different perspective of those 
designing these formularies. The VA chooses preferred drugs among 
competing generics based on a combination of clinical evidence and 
price. By contrast, Part D plans have incentives to list on formulary 
most or all of the generics in a particular class. Lacking any close 
relationships with prescribing physicians, they must rely on 
enforcement at the pharmacy to encourage use of one particular generic 
over another. Doing so risks alienating their enrollees for minimal 
financial gain and may discourage enrollment if drugs are listed as 
off-formulary on the Medicare's online Drug Plan Finder.
    As noted above, the approach to formulary design in an integrated 
health plan is more like the VA system than other Part D plans. It is 
not surprising, therefore, that Kaiser Permanente formularies were 
similar in scope to the VA formulary (Table 1). In both of its 
California regions, Kaiser Permanente listed slightly fewer sample 
drugs on formulary (77 and 79) than the VA National Formulary. Like the 
VA, the Kaiser plans are more likely than other Part D plans to omit 
generic drugs from their formularies.
Comparisons at the Drug Class Level
    Comparisons between the VA National Formulary and the Part D plan 
formularies vary considerably by drug class (Table 2). One reason for 
the variation is that some drug classes (e.g. beta blockers) consist 
mostly of generic drugs. Most Part D plans list nearly all generics on 
formulary, whereas the VA is more likely to omit generic drugs from its 
formulary for such classes. Specific program rules also affect the 
comparisons. For example, Part D plans include more anti-depressants at 
least partly because Medicare guidelines require that nearly all unique 
anti-depressants be listed on formulary, although the guidelines do not 
require that coverage be unrestricted.

                                          Table 2. Formulary Listings by Class, VA and Part D Formularies, 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        VA         National Formulary              Median, 47     KP   Northern CA     KP   Southern CA
         Drug Class               Drugs                                                             National
                                 Studied                                                             Plans*
--------------------------------------------------------------------------------------------------------------------------------------------------------
Anti-Dementia Agents                    6                                 5                                 4                 3                    3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Anti-Depressants                       30                                18                                23                24                   24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Beta Blockers                          15                                 7                                14                 6                    9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Calcuim Channel Blockers                9                                 5                                 6                 4                    3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cholesterol Agents                     18                                 7                                11                 4                    5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Diabetes Agents                        16                                 5                                12                 6                    8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proton Pump Inhibitors                  6                                 1                                 2                 2                    2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hormonal Agents                        12                                 6                                 4                 7                    6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Renin-Angiotensin                      18                                 8                                10                 3                    3
--------------------------------------------------------------------------------------------------------------------------------------------------------
TNF Inhibitors                          3                                 0                                 0                 3                    3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other Common Drugs                     27                                20                                22                14                   12
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL, SELECTED DRUGS                 160                                82                               104                77                   79
--------------------------------------------------------------------------------------------------------------------------------------------------------
 *Drugs listed on a generic or preferred tier and without prior authorization or step therapy restrictions. Note that the median value for the total is
  not the total of the class medians.

    The pattern is similar for the Kaiser Permanente formularies, but 
the details are different. Kaiser's formularies, for example, list 
fewer drugs in categories such as anti-cholesterol agents or the renin-
angiotensin drugs used to treat hypertension. But Kaiser lists more 
anti-depressants than the typical Part D plan. Kaiser also lists more 
drugs without restriction in the TNF inhibitor class than either the VA 
or the typical Part D plan, because they do not require prior 
authorization for these drugs.
The Class of Cholesterol Drugs
    The contrasting ways that formularies work in the VA compared to 
the standalone Part D plans can be illustrated with the class of 
cholesterol drugs. The VA's coverage of cholesterol agents has been 
criticized because the formulary does not list some popular anti-
cholesterol drugs such as Crestor and Lipitor, while the majority of 
national Part D plans list them without restrictions.\18\ As shown in 
Table 2, the typical Part D plan lists 11 of the anti-cholesterol 
agents in our sample, whereas the VA lists 7 drugs and Kaiser 
Permanente lists just 4 in one region and 5 in another.
---------------------------------------------------------------------------
    \18\ Deroy Murdock, ``VA Program No Model for Helping Americans Buy 
Medications,'' Deseret News, 31 December 2006.
---------------------------------------------------------------------------
    Whenever possible, the VA suggests that a ``high potency'' 
formulary statin should be the first-line treatment prescribed for the 
patient. If he or she fails to meet clinical goals on that drug, 
physicians are advised to consider a second-line therapy (such as 
niacin or non-formulary Zetia) or a switch to a non-formulary statin, 
such as Lipitor.\19\ These guidelines mean that non-preferred or even 
non-formulary drugs are recommended and accessible to veterans, and 
they may be prescribed in greater numbers than their on-formulary or 
unrestricted counterparts. In fact, as Table 3 shows, there is more 
utilization of Zetia, considered a second-line therapy not listed on 
formulary, than the two on-formulary drugs in the Bile Acid 
Sequestrants group. Similarly, prescribing of Lipitor, another second-
line therapy that is not on formulary, is higher than for Lescol, one 
of the on-formulary statins.\20\
---------------------------------------------------------------------------
    \19\ ``Ezetimibe (Zetia) for Nonformulary Use,'' VHA Pharmacy 
Benefits Management Strategic Healthcare Group and the Medical Advisory 
Panel, updated January 2007.
    \20\ After this analysis was completed, changes were made to the VA 
National Formulary's treatment of statins in response to FDA approval 
of generic versions of Pravachol and Zocor.

                             Table 3. Formulary Listing of Cholesterol Agents, 2007
----------------------------------------------------------------------------------------------------------------
                                                                                       # of 47 Part
                                                                              On VA    D plans with       VA
                       Drug*                             Generic Name      Formulary?  unrestricted  Utilization
                                                                                         coverage      FY 2006
----------------------------------------------------------------------------------------------------------------
Bile Acid Sequestrants
----------------------------------------------------------------------------------------------------------------
CHOLESTRYAMINE                                                       CHOLESTRYAMINEY           46        52,249
----------------------------------------------------------------------------------------------------------------
Welchol                                                               COLESVELAM   N           20         4,714
----------------------------------------------------------------------------------------------------------------
Colestid                                                              COLESTIPOL   Y           18       168,976
----------------------------------------------------------------------------------------------------------------
Cholesterol Absorption Inhibitors
----------------------------------------------------------------------------------------------------------------
Zetia                                                          EZETIMIBE           N           36       369,783
----------------------------------------------------------------------------------------------------------------
Fibrates
----------------------------------------------------------------------------------------------------------------
Tricor                                                       FENOFIBRATE           N           37       130,181
----------------------------------------------------------------------------------------------------------------
GEMFIBROZIL                                                   GEMFIBROZIL          Y           47     1,771,658
----------------------------------------------------------------------------------------------------------------
Nicotinic Acid
----------------------------------------------------------------------------------------------------------------
Niaspan ER                                                        NIACIN           Y           41     1,258,306
----------------------------------------------------------------------------------------------------------------
Omega-3 Fatty Acids
----------------------------------------------------------------------------------------------------------------
Omacor                                                      OMEGA-3 ACID           N           13           827
----------------------------------------------------------------------------------------------------------------
Statins
----------------------------------------------------------------------------------------------------------------
Lipitor                                                     ATORVASTATIN           N           34       711,138
----------------------------------------------------------------------------------------------------------------
Lescol                                                                 FLUVASTATIN Y            8       500,954
----------------------------------------------------------------------------------------------------------------
Altoprev ER                                                             LOVASTATIN N            9            12
----------------------------------------------------------------------------------------------------------------
LOVASTATIN                                                              LOVASTATIN Y           47     1,424,081
----------------------------------------------------------------------------------------------------------------
Mevacor                                                                 LOVASTATIN N            4       376,688
----------------------------------------------------------------------------------------------------------------
Pravachol                                                    PRAVASTATIN           N            1        56,255
----------------------------------------------------------------------------------------------------------------
PRAVASTATIN                                                  PRAVASTATIN           N           33            **
----------------------------------------------------------------------------------------------------------------
Crestor                                                     ROSUVASTATIN           N           33       144,341
----------------------------------------------------------------------------------------------------------------
SIMVASTATIN                                                  SIMVASTATIN           Y           45            **
----------------------------------------------------------------------------------------------------------------
Zocor                                                        SIMVASTATIN           N            5    16,487,514
----------------------------------------------------------------------------------------------------------------
 *Drug names in all capital letters are generic drugs.
 **Data are not available for the newly approved generic versions of pravastatin and simvastatin. Previously,
  the brand version of Zocor was on formulary.

    Comparative effectiveness reviews of clinical evidence have led to 
a similar conclusion to that of the VA. The Consumer Reports ``Best Buy 
Drugs'' report, based on research by the Drug Effectiveness Review 
Project, recommends use of one of three generic statins, with Lipitor 
as an alternative for patients who have had a heart attack or acute 
coronary syndrome together with highly elevated LDL.\21\ Among the 47 
national and near-national Part D plans, 34 list Lipitor and 33 list 
Crestor, while nearly all list generic drugs lovastatin and 
simvastatin.
---------------------------------------------------------------------------
    \21\  http://www.bestbuydrugs.org/drugreport_DR_Statins.shtml
---------------------------------------------------------------------------
    Another factor that affects the formulary comparisons is the 
Medicare Program's guidance requiring that Part D plans list on 
formulary at least one drug in each subgroup of cholesterol drugs, 
although plans may use coverage restrictions. The VA has no such 
mandatory coverage requirement. Because Zetia and Omacor are the only 
drugs in their subgroups, Part D plans must list them, whereas the VA 
formulary does not. Nevertheless, shown in Table 3, not all Part D 
plans have unrestricted coverage of these drugs. The VA, which 
recommends Zetia as a second-line therapy, filled about 370,000 
prescriptions for the drug.
Conclusions
    An objective comparison of unrestricted coverage by Medicare Part D 
plans to the VA National Formulary shows that the VA formulary is 
modestly smaller than the typical Part D plan formulary and about the 
same as formularies used by Kaiser Permanente. But formulary size is 
not the same as access to drugs. This small gap largely reflects the 
difference between integrated and non-integrated health systems and the 
resulting approaches to ensuring access.
    The VA National Formulary is closely tied to its prescribing 
system. Like a staff-model or group-model HMO, physicians in the VA 
system participate in creating the formulary and commit to prescribing 
from it when it meets their patients' needs. Patients in both of these 
integrated healthcare systems are less likely than other types of Part 
D or private health plans to receive a prescription, only to be told 
later that it is not covered or covered at a much higher price than a 
more preferred drug. The incentive in integrated systems is for 
physicians to prescribe from the formulary when they can, but it is a 
relatively straightforward process to obtain authorization for any drug 
that is not on the formulary. By contrast, physicians treating patients 
in non-integrated systems face a variety of formularies for the 
different plans in which their patients are enrolled, and they are 
unlikely to prescribe according to each patient's formulary unless the 
plan or patient points out which drugs are preferred. It is essential 
when making comparisons with regard to access to drugs between the VA 
and other plans to keep these differences in mind.
    A full comparison of access to prescription drugs between the VA 
system and other health systems would require more extensive studies, 
such as surveys or clinical outcome studies. Nevertheless, this 
comparison of Medicare Part D plan formularies to the VA formulary 
lends support to the conclusion that veterans maintain good access to 
prescription drugs through the VA National Formulary.

                                 
           Prepared Statement of Frank R. Lichtenberg, Ph.D.,
                Courtney C. Brown Professor of Business,
       Columbia University, New York, NY, and Research Associate,
                  National Bureau of Economic Research
       Access to new drugs in the Veterans Health Administration
         Access to medical innovations T  longevity and health
      Research that I and other economists have performed 
indicates that access to medical innovations--new drugs, medical 
procedures, and devices--is one of the most important determinants of 
longevity and health.
      Four years ago I performed a study that examined access 
to new drugs under the pharmacy benefits management system of the 
Veterans Health Administration. Since 1997, the VA National Formulary 
has played a key role in that system.
      The fractions of drugs approved in the 1950s, 1960s, 
1970s, and 1980s that were on the 2005 VA National Formulary were 
almost identical: 52-53 percent.
      However, only 38 percent of the drugs approved in the 
1990s, and 19 percent of the drugs approved since 2000, were on the VA 
National Formulary. Only 22 percent (17) of the 77 priority-review 
drugs approved since 1997 were on the 2005 National Formulary. (Figure 
1)
[GRAPHIC] [TIFF OMITTED] 53427A.001


                    Older drugs used by VA patients
      The drugs used in the VA health system during 1999-2002 
were older than the drugs used in the rest of the U.S. healthcare 
system. For example, the percentages of VA and non-VA prescriptions for 
drugs less than 5 years old were 5.6 percent and 8.6 percent, 
respectively, and the percentages for drugs less than fifteen years old 
were 31.4 percent and 39.0 percent. (Figure 2)
[GRAPHIC] [TIFF OMITTED] 53427A.002


      The percent of drugs less than 10 years old increased by 
1.4 percentage points per year in the non-VA sector, and by 0.6 
percentage points per year in the VA sector. The percent of drugs less 
than 15 years old increased by 1.9 percentage points per year in the 
non-VA sector, and had virtually no increase in the VA sector.
      These estimates are consistent with the hypothesis that 
implementation of the VA National Formulary beginning in 1997 reduced 
utilization of new drugs in the VA healthcare system.
 Older drugs T  reduced longevity, higher utilization of hospitals and 
                             nursing homes
      I present estimates of the impact of utilization of new 
drugs on longevity, based on annual data on Medicaid drug utilization 
and mortality by State, disease, and year, for all 50 States during the 
period 1991-2001.
      The estimates imply that use of older drugs in the VA 
system reduced mean age at death of its patients by 0.17 years, or 2.04 
months. The per-patient value of this reduction in longevity may exceed 
$25,000.
      I use demographic data published by the VA to compute the 
life expectancy of veterans before and after the National Formulary was 
implemented. Veterans' life expectancy increased substantially before 
the National Formulary was introduced (during 1991-1997), but did not 
increase, and may have even declined, after it was introduced (1997-
2002). (Figure 3)
[GRAPHIC] [TIFF OMITTED] 53427A.003


      The life expectancy at birth of all U.S. males increased 
after as well as before 1997, although the rate of growth declined by 
about a third. (Figure 4)
[GRAPHIC] [TIFF OMITTED] 53427A.004


      Implementation of the VA National Formulary is likely to 
have increased utilization of hospitals and nursing homes. I estimate 
that if the age of the drugs used by the Medicare population were 
increased to match that used in the VA health system, the increase in 
hospital, home healthcare, office-visit, and nursing-home expenditure 
among the elderly would be about $5.1 billion per year.
                              Bibliography
      Lichtenberg, Frank R., ``Older Drugs, Shorter Lives? An 
Examination of the Health Effects of the Veterans Health Administration 
Formulary,'' Medical Progress Report No. 2, October 2005, http://
www.manhattan-institute.org/html/mpr_02.htm
      Lichtenberg, Frank R., Paul Grootendorst, Marc Van 
Audenrode, Dominick Latremouille-Viau, and Patrick Lefebvre, ``The 
impact of drug vintage on patient survival: a patient-level analysis 
using Quebec's provincial health plan data,'' Value in Health 12 (6), 
2009, pp. 847-856.
      Lichtenberg, Frank R., ``Have newer cardiovascular drugs 
reduced hospitalization? Evidence from longitudinal country-level data 
on 20 OECD countries, 1995-2003,'' Health Economics 18 (5), 2009, pp. 
519-534.
      Lichtenberg, Frank R., and Gautier Duflos, 
``Pharmaceutical innovation and the longevity of Australians: a first 
look,'' Advances in Health Economics and Health Services Research 19, 
2008, pp. 95-117.
      Lichtenberg, Frank R., ``The Impact of New Drugs on U.S. 
Longevity and Medical Expenditure, 1990-2003,''American Economic Review 
97 (2), May 2007, pp. 438-443.
      Lichtenberg, Frank R., ``Pharmaceutical Innovation and 
U.S. Cancer Survival, 1992-2003: Evidence from Linked SEER-MEDSTAT 
Data,'' Forum for Health Economics & Policy: Vol. 10: Iss. 1 (Frontiers 
in Health Policy Research), Article 1. http://www.bepress.com/fhep/10/
1/1

                                 
    Prepared Statement of Richard F. Weidman, Executive Director for
       Policy and Government Affairs, Vietnam Veterans of America
    Chairman Michaud, Ranking Member Brown and distinguished Members of 
the Subcommittee, on behalf of National President John Rowan, our Board 
of Directors and Members, I thank you for giving Vietnam Veterans of 
America (VVA) the opportunity to testify today regarding the ``Is the 
VA Meeting the Pharmaceutical Needs of Veterans? An Examination of the 
VA National Formulary, Issues of Patient Safety, and Management of the 
Pharmacy Benefits Program.''
    In May of this year VVA wrote to Chairman Filner as part of VVA's 
answer to his question about issues that need to be addressed by the 
House Veterans Affairs Committee VVA responded with five issues, one of 
which is described below:

           Pharmacy Service--the formulary is much too restrictive (and 
        much more restrictive than either DoD or Medicare) on the 
        theory that they are going to save a lot of money on 
        medications. However, they often save pennies and spend big 
        dollars because they scrimp on medications that could have 
        prevented very costly acute care in-patient stays. The method 
        of evaluating pharmacists needs to be dramatically changed from 
        how much in ``savings'' they produce in comparison with the 
        national average (which becomes a ``race to the bottom'') to 
        how much did what they do in cooperation with the medical staff 
        at a given VA Medical Center to promote healing and wellness, 
        and reduce in-patient acute care stays in the hospital, and/or 
        to prevent secondary conditions from developing.

    The crux of this issue remains the same some 5 months later.
    In lay terms, VVA believes that what we have at the Veterans Health 
Administration (VHA) of the U.S. Department of Veterans Affairs (VA) is 
a mentality that tries to reduce front end costs (e.g., pharmaceutical 
costs) which they call ``cost avoidance,'' without regard to overall 
impact either on the health of the individuals concerned or the overall 
cost impact on the system. In other words, they save some money by 
artificially limiting the number and type of pharmaceuticals that are 
generally available to clinicians at the VHA facilities, regardless of 
whether that in the medium to long-run it causes veterans to have 
secondary conditions. This practice is justified on the basis of ``cost 
effectiveness'' within the context of just pharmaceuticals alone, 
without regard for the rest of the medical setting.
    It is ironic that the Research & Development section of VA is 
holding a conference tomorrow in Washington to look at ``comparative 
effectiveness'' in research and in other applications. While models 
such as evidence based medicine has a real place, and has been of 
significant use especially in treating psychiatric problems, it has all 
too often been misapplied to practical allocation of resources, such as 
the way in which VHA has implemented the formulary at VHA. VVA would 
suggest that ``comparative effectiveness'' be applied to the overall 
healthcare system, in such a way as to focus on ``comprehensive 
effectiveness.''
    Frankly, ``comparative effectiveness'' has been misapplied to the 
VA formulary in such a way that it is a ``race to the bottom.'' 
Furthermore, when you are sick, Mr. Chairman, you are not necessarily 
in the majority part of the group that inexpensive ``drug A'' worked 
for just as well as the more expensive (usually copyright/patent 
protected) ``drug B'' when the two were tested for efficacy against 
each other. The decision of which to offer should be a clinical 
decision by the physician in concert with the patient, as to what is 
going to work the best for the individual patient. The practical tools 
available to a veterans' physician should not be artificially limited 
by what is listed on the VA formulary.
    We know if something is not on the formulary, it is very difficult, 
if not impossible, for most patients of that physician to get it. When 
we raise this issue, VA retorts that any physician can order any Food & 
Drug Administration (FDA) approved medication, whether it is on the 
formulary or not. While theoretically a physician can secure 
medications not on the formulary, as a practical matter it is 
inordinately difficult and time consuming to do so, and if a physician 
does it too often, they are ``counseled'' by their supervisor.
    VVA has made the point to three of the most recent Undersecretaries 
for Health at VA, and to Secretary Peake when he was in office, that 
the VA National Formulary decision-making process lacks transparency 
and public input that would cause them to have to justify keeping 
something off of the formulary as opposed to putting something on the 
formulary. This is just not right, and no way to make public ``life or 
death'' policy decisions. This entire process needs to play out in the 
open, in the sunshine, where it can clearly be seen by the public and 
by clinicians what is being done and why it is being done. That is not 
the case at VHA today.
    The VA formulary has just over 1,300 drugs while the average 
Medicare Part D formulary has more than 2,000 drugs. Only 38 percent of 
the drugs approved by the FDA in the 1990s, and 19 percent of the drugs 
approved since 2000, are on the VA National Formulary. It is clear to 
us that the VA has a policy bias toward generics and those drugs whose 
patents have expired, making them cheaper. This is despite the fact 
that the VA has the best price in the world on pharmacy medications.
    While we do not believe that ``newer'' is always better, that is a 
clinical decision that the veteran's individual physician should be 
making, and not ``the green eye shade'' fiscal guys in a back room 
somewhere.
    The restrictive VA formulary could have a deleterious effect on the 
longevity and quality of life of veterans. Just one example of this is 
how slow VHA was to add the long-lasting insulin to the VHA formulary 
(and then only after significant pressure from VVA and from this 
Committee), and the fact that many of the most effective treatments for 
diabetes, many of which have appeared on the market since 2000, are 
still not available on the VA formulary. The average beneficiary has 
better access to newer diabetes and heart disease drugs through 
Medicare Part D and Medicaid than does the average veteran through the 
VA. This is just wrong, and needs to be fixed by broadening the VA 
formulary, and by opening up this whole process.
    The toughest things to get on the VA formulary of all are the most 
innovative ``new molecular entities'' almost all of which are still 
under patent, and therefore avoided by the VA decisionmakers. In this 
instance there is apparently an evidence based process, but it can be 
(and often it is) vetoed by the pharmacy people strictly on the basis 
of the cost of the medication, and not by any part of an overall 
decision as to what is best for the veteran's overall health, nor the 
like total cost to the medical system of NOT providing this medications 
to veterans who would be helped by it.
    By restricting access to innovative drug therapy for chronically 
ill veterans, VVA believes that the overly restrictive VA formulary may 
result in less than optimal health outcomes. Said another way, it is 
our belief that many of the VA Medical Centers are not doing such a 
great job of controlling the measures of diabetes A1C, partly because 
of the restrictive policies on medications. This results in ``spikes'' 
that are what cause the secondary conditions and/or very costly 
inpatient hospitalization stays in some of the more than a million 
diabetics being treated by VA. For this reason, it also results in the 
veteran developing secondary conditions, which are also service 
connected and result in higher monthly payments. But, obviously, the 
key thing here is the diminishment of the quality of life for the 
individual veteran.
    While the 2000 Institute of Medicine (IOM) study of the then newly 
implemented (1997) VA National Formulary . . . ``found that the VA 
National Formulary is not overly restrictive, and the limited available 
evidence suggests that it has probably meaningfully reduced drug 
expenditures without demonstrable adverse effects on quality.''
    However, the IOM report findings continue: ``The (IOM VA Formulary 
Study) Committee also concluded that there are manifold opportunities 
to improve the management of the formulary system used by the VHA. The 
National Formulary lacks essential systems to assure that new drugs are 
expeditiously reviewed for inclusion, and that a responsive process for 
assuring access to medically necessary exceptions to the formulary is 
consistently in place system-wide, that therapeutic interchange is 
accomplished in a flexible and consistent way, sensitive to patient 
risk, across the far-flung VHA system, and that views of critical 
constituencies of both providers and patients are represented in the 
management of the National Formulary . . .''
    Perhaps most troubling, the (IOM) Committee found ``a dearth of 
information to evaluate the full impact of the National Formulary on 
veterans health and satisfaction, and on the VHA.'' That remains the 
case today because the VA process takes place in the back room, out of 
public view.
    Since the time of the IOM Study of the VA National Formulary, the 
VA Formulary and Formulary process has only grown more restrictive and 
little has been done to address the concerns expressed in the IOM 
study. Individual Veterans Integrated Services Network (VISN) 
formularies have been eliminated in favor of only a consolidated VA 
National Formulary.
    The VA Formulary process involves internal Pharmacy and Medical 
expertise through its own Medical Advisory Panel (MAP) and is cross 
connected to the Department of Defense Pharmacoeconomic Center (DoD 
PEC) and Indian Health but does not have outside professional or 
beneficiary interest represented, such as the Veteran Service 
Organizations, or professional pharmacy and pharmacists organizations, 
or advocacy groups like the American Diabetes Association. Appropriate 
national level professional organizations that would best represent the 
patient as relates to safe and appropriate medication use, could 
include representation from professional organizations such as the 
American Pharmacists Association (APhA), American Society of Health-
System Pharmacists (ASHP), Academy of Managed Care Pharmacy (AMCP), and 
American Society of Consultant Pharmacists (ASCP), as well as other 
professional medical societies.
    The lack of transparency and insular nature of the VA formulary 
decision-making process is problematic and leaves unanswered questions 
about access to care, chronic disease care, criteria use in reaching 
decisions (e.g., costs versus long-term clinical effectiveness). VA 
should publish specific drug decision-making criteria, including the 
therapeutic category review schedule, decision-making process, Pharmacy 
and Therapeutics Committee and Medical Advisory Panel members, meeting 
schedules, and discussions of specific decisions. In addition, the 
public should have an opportunity to submit information to the VA 
Pharmacy and Therapeutics Committee in preparation for each decision 
meeting.
    The VA formulary decision-making process should also include a VA 
Pharmacy Beneficiary Advisory Committee as does the Department of 
Defense TRICARE Uniform Formulary process. For example, the Department 
of Defense/TRICARE publically announces in advance its therapeutic 
class review schedule, the specific drugs for review, and the criteria 
for comparing different drugs. The DoD Pharmacoeconomic Center (PEC) 
receives pricing and clinical data from the public including 
pharmaceutical companies which are considered by the DoD Pharmacy and 
Therapeutics (P&T) Committee. The DoD publishes on its Web site (http:/
/www.pec.ha.osd.mil/) the recommendation of the P&T Committee, the 
rationale, and summary of the data considered.
    These recommendations are then reviewed by a DoD Beneficiary 
Advisory Panel (BAP; http://www.tricare.mil/pharmacy/bap/) composed of 
non-government beneficiary, professional and patient advocacy 
organization representatives, TRICARE contractors, and others. These 
meetings are also announced in advance, open to the public, and the 
results are published on the PEC Web site. The P&T Committee and the 
BAP recommendations are then forwarded to the Director of the TRICARE 
Management Activity for final decision. In most cases, newly FDA-
approved prescription medications are available from TRICARE network 
pharmacies and the mail-order pharmacy program shortly after they 
become commercially available. Furthermore, the public has the 
opportunity for input at each step in the decision-making process, and 
it is transparent.
    Conversely, the Department of Veterans Affairs National Formulary 
decision-making process lacks transparency and opportunity for public 
input. This results in major disadvantages for VA patients and the 
quality of VA healthcare. It can be argued that the overly restrictive 
VA formulary as it stands today is significantly distorting the 
practice of medicine at the VA, to the detriment of the health of 
veterans who seek care there.
Recommendations:
    Optimally, the Congress will pass a law mandating an open and 
transparent process that is modeled on the law for DoD/TRICARE, and is 
at least as open and transparent a process (if not more so) than the 
DoD procedure. The DoD process automatically includes all medications 
approved by the FDA. It is up to managers to justify restricting access 
to a medication by removing it from the formulary, and this has to play 
out in a public setting with significant input from advocacy groups, 
medical societies, and other interested parties. VA should do no less 
for our veterans once they take off the uniform.
    Short of this much needed comprehensive overhaul or transformation 
of the VA formulary, or perhaps while the Committee is working to draft 
and secure passage of this legislation, VVA recommends the following 
steps be taken immediately by Secretary Shinseki:
    Change the performance evaluation criteria for Chief pharmacists to 
measure his or her contribution toward the overall wellness of the 
patients at a particular Medical Center. There are currently no such 
metrics in place, but they can be developed and these contributions 
measured, just like almost anything else. (Currently the pharmacists 
are rewarded by how much ``cost avoidance'' they can achieve in 
comparison with the national mean. This, of course, means that it is a 
``race to the bottom.'' It is a testimony to the professionalism and 
commitment to good medicine by the pharmacists that, given the way the 
system is set up, with the emphasis on cost containment/cost reduction, 
that so many veterans do get the right medication in the right amount 
when they need it.)
    The VA P&T Committee meeting schedule, therapeutic categories to be 
reviewed, and review criteria should be publically announced well in 
advance of P&T meetings.
    The VA P&T Committee should establish a procedure to accept and 
consider public input for these Formulary meetings.
    The VA P&T Committee should publish its recommendations made in the 
last decade with rationale for the conclusions and recommendations of 
the Committee.
    The Secretary of Veterans Affairs should establish a Beneficiary 
Advisory Committee (BAC) of representatives from a representative 
sampling of major veterans, patient advocacy, and healthcare 
professional groups with the responsibility and authority to make 
recommendations on the decisions of the VA P&T Committee including 
addition, deletions, clinical use criteria, and preauthorization 
requirements on drugs on the VA National Formulary.
    Meetings of the VA Formulary Beneficiary Advisory Committee should 
be open to the public and the minutes and considerations of all BAC 
recommendations published on the VA P&T Committee Web site in a timely 
manner.
    Like the DoD Beneficiary Advisory Panel, the VA Formulary 
Beneficiary Advisory Committee should include at least 12-15 members 
and have the opportunity to make Recommendations prior to final 
decision on VA National Formulary changes and other pharmaceutical 
issues. At least two of the following organizations should be included 
in the membership of the VA Beneficiary Advisory Committee, the 
American Pharmacists Association (APhA), American Society of Health-
System Pharmacists (ASHP), Academy of Managed Care Pharmacy (AMCP), and 
American Society of Consultant Pharmacists (ASCP).
    The VA Formulary Beneficiary Advisory Committee should have the 
authority to recommend to the VA drug categories and new drugs to be 
reviewed, changes to the criteria for use, clinical guidelines, 
restrictions on use, etc.
    The Veterans Health Administration should be required to consider 
the recommendations of the VA Formulary Beneficiary Advisory Committee 
prior to making final decisions on VA Uniform Formulary including 
addition, deletions, clinical use criteria, and preauthorization 
requirements.
Conclusion
    The Secretary of Veterans Affairs could do some, all, or most of 
the nine steps outlined here above within the scope of his authority. 
However, there will be stiff resistance on the part of VHA officials 
who like the status quo. All too often, some seemingly do not believe 
that they should be answerable to anyone outside of that closed system, 
much less individual veterans or veterans' service organizations. These 
folks will have millions of reasons not to change, and perhaps so will 
some at the Office of Management & Budget (OMB). They also have their 
own constituencies around Washington who will tell the Secretary that 
it is ``just too expensive'' to provide expensive drugs to veterans. 
These individuals have had years of practice in ``push back'' to 
prevent any significant change being accomplished without legislation 
passing the Congress.
    It is our belief that the time is right for this Subcommittee to 
take the lead in creating a statutorily directed formulary that is 
inclusive as a starting point, that is totally transparent, and that 
has to take into account input from stakeholders, both medical 
professionals and advocates outside of government. The VA continues to 
have great ``bargaining power'' to secure the best possible prices on 
each and every medication, and we believe that the private sector will 
be reasonable in this regard. In any case, it is impossible to say 
``Care Second to None'' until we clean up this major problem with the 
VA formulary.
    If we are going to assist the President to achieve transformation 
of the VA for the 21st century, then there is no better place to start 
than ensuring full transparency in the VA formulary, and a presumption 
of inclusion of all FDA approved medications. And, for that, we need 
bi-partisan legislation and the strong leadership from this 
Subcommittee on this issue.
    Thank you for your leadership in holding this hearing on a crucial 
subject, Mr. Chairman. I will be pleased to answer any questions, and 
look forward to working with you and your colleagues to greatly improve 
this vital service to veterans.

                                 
           Prepared Statement of William Ray Bullman, M.A.M.,
   Executive Vice President, National Council on Patient Information
                      and Education, Bethesda, MD
    Good afternoon Mr. Chairman and Members of the Subcommittee. I am 
Ray Bullman, Executive Vice President of the National Council on 
Patient Information and Education (NCPIE). I've been asked to testify 
this afternoon relative to NCPIE patient medication safety efforts and 
best practices or innovative means that NCPIE coalition Members utilize 
to enhance medication safety.
    I would note at the outset that NCPIE does not focus specifically 
on formulary issues. Yet, recognizing the role and impact that 
formulary decision-making ultimately plays downstream on patient--
healthcare provider communication, informed decision-making about 
therapy choice and what medication is prescribed or recommended and 
why, and ultimately--to what extent patients effectively self manage 
their medication therapy, NCPIE is pleased to help support the work of 
the Subcommittee this afternoon and moving forward. Additionally, I 
would point out that NCPIE educational messages and materials are 
motivated by what we refer to as the ``3Rs'' for Safe Medicine Use. 
They are:

      Risk-recognize that all medicines (prescription and 
nonprescription) have risks as well as benefits; and you need to weigh 
these risks and benefits carefully for every medicine you take.
      Respect-respect the power of your medicine and the value 
of medicines properly used.
      Responsibility-take responsibility for learning about how 
to take each medication safely. Being responsible also means following 
this important rule: when in doubt, ask first. Your healthcare 
professional can help you get the facts you need to use medicines 
correctly.

    These ``3 Rs'' are likely similar to motivators for healthcare 
providers within the VA as they make evidence-based formulary decisions 
and VA pharmacists, as they collaborate with members of the VA's 
interdisciplinary healthcare team, and as they counsel patients about 
safe and appropriate medicine use. As such, NCPIE is pleased to help 
support VA pharmacists, a subset of the Nation's medication experts, as 
they work collaboratively within the VA pharmacy system on what NCPIE 
refers to as the ``Medicine Education Team,'' to help optimize 
medication therapy and to minimize patient risks.
About NCPIE
    NCPIE was established in October 1982 as a non-profit organization. 
Its founding Chair was Congressman Paul G. Rogers (who served 24 years 
in the U.S. House of Representatives representing West Palm Beach, FL, 
and during his tenure was referred to as ``Mr. Health'' for his leading 
role in passing dozens of measures promoting healthcare and the 
environment). The late Honorable Congressman Rogers served as NCPIE's 
Chair for 16 years.
    NCPIE is a diverse coalition of organizations working to stimulate 
and improve communication of information on the appropriate use of 
medicines to consumers and healthcare professionals. NCPIE develops 
programs, provides educational resources, issues research reports, 
conducts special issues meetings and multi-media campaigns, such as our 
annual ``Talk About Prescriptions'' Month every October. As such, 
NCPIE's activities are guided by three common values: 1) to represent a 
wide spectrum of organizations serving the public health through 
educational and advocacy programs; 2) to empower consumers to be more 
informed about and active in decisions affecting their use of 
medicines; and 3) to be a catalyst and convener for the development of 
new, useful, and scientifically accurate information about medicine use 
that is disseminated in multiple formats to a wide range of audiences.
    What makes NCPIE unique, besides its long-term focus on the 
appropriate use of medicines, is the depth and breadth of its national 
coalition of nearly 100 organizations committed to providing patients 
with useful and appropriate medicine information. The NCPIE coalition 
includes: consumer organizations; patient advocacy groups, and 
voluntary health agencies; organizations representing healthcare 
professionals and health educators; schools of pharmacy; State and 
Federal Government agencies; health-related trade associations; 
national and international private sector companies including 
pharmaceutical manufacturers, patient information/database companies, 
and managed care organizations.
    NCPIE is based in Bethesda, Maryland. J. Leonard Lichtenfeld, M.D., 
representing the American Cancer Society, currently serves as NCPIE's 
Chairperson.
Patient Medication Safety Issues/Current and Ongoing NCPIE Programs
    NCPIE is one of the original patient safety organizations, 
addressing safe and appropriate medicine use through the 
identification, development, and dissemination of educational messages 
and resources to promote safe and appropriate medicine use. NCPIE also 
convenes and participates in ongoing and ad-hoc external collaborations 
and issues-driven project partnerships, striving to address a wide 
range of potential medication safety (safe use) issues, as described 
below:
    Safety Issues Related to Communicating Risk via Written Consumer 
Medicine Information--NCPIE, in 1996, at the request of then HHS 
Secretary Shalala, participated in the development of a 10-Year Action 
Plan for the Provision of Useful Prescription Medicine Information. The 
Action Plan, which included criteria for quality improvements for both 
clinical content and the design, layout, and readability of written 
medicine information leaflets conveyed by community pharmacies with 
every retail prescription, sunset in December 2006. The Food and Drug 
Administration as the lead agency responsible for assessing to what 
extent Action Plan quality improvements were achieved by the private 
sector during this 10-year period, is conducting a 2-day workshop later 
this week to obtain key stakeholder input on proposed new prototypes 
for such useful written information and to seek input on a research 
agenda to ensure consumer input on the development, design, and testing 
of such written information. NCPIE is participating in the workshop as 
a reactor panelist.
    Safety Issues Related to Medication Nonadherence--Although the 
challenge of poor adherence has been discussed and debated for at least 
three decades, these problems have, until recently, generally been 
overlooked as a major healthcare priority. NCPIE has since 1995 called 
for national action to address this major public health problem that 
has recently been estimated to cost the U.S. economy over $290 billion 
annually--or 13 percent of total healthcare expenditures (New England 
Health Care Institute, July 2009). Consider:

      Nearly 3/4 of Americans report they don't take their 
medications as directed;
      One in three never fill their prescriptions;
      For common chronic conditions such as diabetes and 
hypertension, proper adherence averages only 50-65 percent;
      Three-69 percent of medication-related hospital 
admissions are linked to poor adherence.

    Failure to follow medication regimes is especially harmful to 
people with chronic health conditions. When those with chronic 
conditions fail to follow their medication regimen, they risk decreased 
productivity, a lesser quality of life, a more rapid progression of 
their condition, complications, hospitalization, and even death. 
Employers are seeing billions of dollars lost to chronic condition-
related absenteeism and presenteeism (when employees report for work, 
but do not function at full capacity). It is estimated that diabetes 
accounts for 120 million work days lost every year to presenteeism.
    In 1995, NCPIE released the referenced report, ``Prescription 
Medicine Compliance: A Review of the Baseline of Knowledge,'' which 
outlined the health consequences of nonadherence and defined key 
factors contributing to poor medication adherence. The report included 
an overview of strategies to enhance adherence, along with 
implementation tools and materials.
    In August 2007, NCPIE released its second report, ``Enhancing 
Prescription Medicine Adherence: A National Action Plan.'' This 
referenced report was released as a renewed nationwide call to action 
for improving medication adherence through patient information and 
education, health professional intervention, expanded research, and 
supportive government policies. The report includes 10 recommendations 
for action that cross-cut the continuum of care--from diagnosis through 
treatment and follow-up patient care and monitoring. The report is 
available for download at www.talkaboutrx.org.

     1.  Elevate patient adherence as a critical healthcare issue.
     2.  Agree on a common adherence terminology that will unite all 
stakeholders.
     3.  Create a public/private partnership to mount a unified 
national education campaign to make patient adherence a national health 
priority.
     4.  Establish a multidisciplinary approach to compliance education 
and management.
     5.  Immediately implement professional training and increase the 
funding for professional education on patient medication adherence.
     6.  Address the barriers to patient adherence for patients with 
low health literacy.
     7.  Create the means to share information about best practices in 
adherence education and management.
     8.  Develop a curriculum on medication adherence for use in 
medical schools and allied healthcare institutions.
     9.  Seek regulatory changes to remove roadblocks for adherence 
assistance programs.
    10.  Increase the Federal budget and stimulate rigorous research on 
medication adherence.

    Safety Issues Related to Prevention of Medication Abuse Among 
Teens--While the use of tobacco, alcohol and illicit drugs is declining 
overall, a new threat is emerging; more teens are abusing prescription 
drugs than any illicit drug, except marijuana. The misuse and abuse of 
prescription medications--the very same drugs used to legitimately 
relieve pain, and treat conditions like anxiety, depression, sleep 
disorders, or ADHD in some people--is a growing and under-recognized 
problem that puts young lives at risk.

      One in 5 teens (or 4.5 million) has deliberately abused 
these drugs.
      One in 3 teens surveyed says there is ``nothing wrong'' 
when using prescription drugs ``every once and a while.''
      Every day, 2,500 youth (12-17) abuse a prescription pain 
reliever for the very first time.

    NCPIE, with contract support from the Substance Abuse and Mental 
Health Services Administration (SAMHSA), and input from a project 
advisory team of over a dozen national organizations involved in drug 
abuse prevention and teen health, has developed two collaborative 
educational campaigns to promote prevention of prescription medicine 
abuse among teenagers:

      ``Not Worth the Risk_Even If It's Legal,'' consisting of 
English and Spanish language television and radio spots, a newspaper 
article (English and Spanish distributions) and two educational 
brochures, one targeting teens and one targeting parents. All of the 
campaign elements are posted for viewing on www.talkaboutrx.org.
      ``Maximizing Your Role as a Teen Influencer: What You Can 
Do To Help Prevent Teen Prescription Drug Abuse,''--turn-key 
educational workshop materials (Power Point presentation with 
presenter's notes and a comprehensive Presenter's Guide) to equip teen 
influencers (e.g., parents, teachers, school administrators, coaches, 
community leaders, physicians and pharmacists) with the knowledge and 
skills to communicate with teens and help curb prescription drug abuse.
      NCPIE has begun development of a third resource, an 
online ``Tool Kit for Curbing Prescription Medicine Abuse on America's 
College Campuses,'' in October 2009.

    Safety Issues Related to Proper Disposal of Pharmaceuticals--Proper 
disposal of unused medications has become a visible and sensitive 
public health and environmental issue. Goals of proper disposal 
programs include: 1) Prevent environmental exposures and impacts from 
improper pharmaceutical disposal, especially to the aquatic ecosystem; 
2) Minimize accidental overdoses by people, pets and wildlife; 3) Limit 
opportunities for drug-related crime and subsequent abuse; 4) Provide a 
safe alternative to drug stockpiling in homes; 5) Preclude outdated 
drug donations; and 6) Facilitate pharmacoeconomic assessments of waste 
and prescriptions, insurance, and reimbursement and dispensing policies 
and practices.
    NCPIE distributes a handout for consumers on proper disposal 
entitled, ``Tips on Safe Storage and Disposal of Your Prescription 
Medicines.'' (www.talkaboutrx.org). NCPIE is also a collaborative 
partner and participant in The Safe Medicine Disposal for Maine. NCPIE 
is represented on the project advisory team for this statewide pilot 
disposal program developed in Maine with grant support from the U.S. 
Environmental Protection Agency (EPA). The program provides a safe and 
anonymous method of drug disposal for Maine residents and is the first 
of its kind in the country. For additional information see: http://
www.safemeddisposal.com/.
    Safety Issues Related to the Prevention of Medication Errors--NCPIE 
is a member of the National Coordinating Council for Medication Error 
Reporting and Prevention (NCC MERP), a coalition of over two dozen 
leading national healthcare organizations who work collaboratively to 
address the interdisciplinary causes of medication errors and to 
promote the safe use of medications. The U.S. Pharmacopeia spearheaded 
the formation of NCC MERP and is a founding member and Secretariat for 
NCC MERP. The Department of Veterans Affairs is also a member of NCC 
MERP. Currently, 14 NCC MERP Recommendations reside on the NCC MERP Web 
site at: http://www.nccmerp.org/councilRecs.html. Select sample titles 
include: Recommendations to Enhance Accuracy of Prescription Writing; 
Recommendations for Health Care Organizations to Reduce Medication 
Errors Associated with the Label, Labeling, and Packaging of 
Pharmaceutical (Drug) Products and Related Devices; and Reducing 
Medication Errors Associated with At-risk Behaviors by Healthcare 
Professionals.
    Safety Issues Related to Safe and Appropriate Use of Acetaminophen 
Products--NCPIE is currently participating in two coalitions (Maryland 
Acetaminophen Coalition and the American Pharmacists Multi-Stakeholder 
Coalition) addressing the safe use of OTC and prescription medicines 
containing the active ingredient acetaminophen. Acetaminophen is sold 
under several brand names and is also available in over 600 cough and 
cold products, sleep aids, and prescription pain relievers.
    The wide spread utilization of acetaminophen by patients may 
increase the incidence and prevalence of misuse, which can lead to 
severe healthcare outcomes. Many cases of overdose are caused by 
patients inadvertently taking more than the current recommended dose of 
a particular product, or by taking more than one product containing 
acetaminophen (e.g., an over-the-counter product and a prescription 
drug containing acetaminophen).
    Safety Issues Related to Older Adults and Medication Use/Misuse--
NCPIE, in 2007, developed and launched The Medication Use Safety 
Training for Seniors TM program (MUST for Seniors 
TM). This turn-key, online educational program for older 
adult medicine users, caregivers, and community-based programs that 
address older adult health and wellness includes a complete menu of 
video vignettes, Power Point presentations with accompanying scripts 
and a range of supporting educational handouts for individuals or group 
participants. See: www.mustforseniors.org.
    The following patient medication safety issues were first described 
by NCPIE in a forward-looking October 1987 referenced report, 
``Priorities and Approaches for Improving Prescription Medicine Use by 
Older Americans.'' The report summarized the problem of improper 
medication use among older adults, its consequences, and factors 
contributing to the problem; identified priorities for resolving 
factors leading to medication misuse; and suggested practical 
approaches to program developers for taking action in the following key 
priority areas: 1) Poor Communication Between Older Patients And Health 
Professionals; 2) Polypharmacy (the use of multiple medicines); 3) 
Multiple Health Care Providers 4) Altered Drug Action and Response With 
Advancing Age; 5) Inability To Take The Medication As Prescribed, and 
6) Deliberate Nonadherence.
    Safety Issues Related to Children and Improper Medicine Use--In 
1989 NCPIE produced a referenced report entitled, ``Children and 
America's Other Drug Problem: Guidelines for Improving Prescription 
Medicine Use Among Children and Teenagers.'' Key findings from the 
report included the finding that improper medicine use among children 
is a widespread problem. Adolescents are even more likely not to take 
medicine as prescribed than children under age 13. Four types of 
improper medicine misuse commonly occur: 1) Stopping a medicine too 
soon; 2) Not taking enough of a medicine; 3) Refusing to take a 
medicine; 4) Taking too much of a medicine. The consequences of such 
improper medicine use are serious: 1) Dangerous health outcomes; 2) 
Inadvertent treatment errors; 3) Life-threatening adverse effects; 4) 
Unpleasant side effects; 5) Unnecessary diagnostic and treatment costs; 
and 6) Greater risk of accidental poisoning.
Select Best Practices, Programs or Policies that NCPIE Member 
        Organizations Employ to Enhance Medication and Patient Safety
    NCPIE is pleased to share best practices, programs, or policies 
that select member organizations employ to enhance safe and appropriate 
medicine use and patient safety. The following represents only a 
partial list of such members' work products:

      American Pharmacists Association
      American Society of Health System Pharmacists
      Academy of Managed Care Pharmacy
      Health Resources and Services Administration, Office of 
Pharmacy Affairs
      Institute of Safe Medication Use (ISMP)
      Pharmacy Coalition Work Product

    American Pharmacists Association (APhA)
    --Medication Therapy Management (MTM) Central--APhA Web content; 
comprehensive information about MTM including links to:

      MTM Certificate Program
      MTM Services Continuing Education Programs
      APhA MTM Digest
      100 MTM Tips for the Pharmacist

    http://www.pharmacist.com/AM/Template.cfm?Section=MTM&Template=/
    TaggedPage/TaggedPageDisplay.cfm&TPLID=87&ContentID=19154

    --``Pharmacist Clinical Services Improve Health Care Quality, Lower 
Health Care Costs--Potential Medication Therapy Management Impact: $30 
Billion in Savings''

    Information presented by APhA to demonstrate possible savings if 
pharmacist clinical services were more widely available for the 
following diseases: Diabetes, Cardiovascular Disease, and Asthma. 
Includes the following data from the Department of Veterans Affairs 
(VA): By extrapolating the average salary data for a pharmacist, the VA 
expects to see an annual $368,000 in savings from each pharmacist by 
providing clinical pharmacy services. (Schumock OT, Butler MC, Meek PD, 
Vermeulen LC, Arondeker BV, Bauman JL. Evidence of the Economic Benefit 
of Clinical Pharmacy Services: 1996-2000 Pharmacotherapy 2003; 
23(1):113-132)
    American Society of Health-System Pharmacists (ASHP)
    ASHP supports all pharmacists being able to play a leadership role 
in medication-use safety. In larger hospitals, a dedicated position is 
necessary to oversee the management of medication safety initiatives. 
This new position has emerged to provide leadership in medication-use 
quality and safety: the Medication Safety Officer (MSO). The MSO is a 
practitioner who serves as an authoritative leader within the 
organization on safe medication use. While an MSO can be a nurse or 
physician, this role is usually filled by a pharmacist or pharmacy 
manager in the Department of Pharmacy. To become an MSO, requirements 
include formal training in medication safety and quality best 
practices. Pharmacists who choose to specialize in medication-use 
safety undergo 10 years of educational training, including an 
accredited postdoctoral residency training program. Job 
responsibilities of an MSO include, but are not limited to, the 
following:

     1.  Managing information on patients and medication
     2.  Overseeing processes for prescribing and monitoring use of 
medication
     3.  Optimizing communication methods to minimize risk for errors
     4.  Minimizing potential for error in medication labeling, 
packaging, and nomenclature
     5.  Standardizing administration, dosing, and storage of 
medication
     6.  Overseeing preparation, distribution, dispensing, and 
administration of medication
     7.  Evaluating and oversee acquisition, use, and monitoring of 
medication delivery devices
     8.  Maintaining safe environmental conditions for patients and 
staff
     9.  Ensuring healthcare staff competence, education, and 
proficiency
    10.  Ensuring patient education
    11.  Maintaining quality processes and oversee risk management
    12.  Ensuring legal and regulatory compliance
    13.  Serving as a liaison to the public for the organization and 
management
    14.  Evaluating integration of technology, automation, and clinical 
information systems
    15.  Promoting Best Practices for safe medication use
    16.  Collaborating with other healthcare disciplines and hospital 
leadership to coordinate system-wide medication safety initiatives.

    ASHP compiles its policy positions, statements, guidelines, 
technical assistance bulletins, therapeutic position statements, 
therapeutic guidelines, and selected ASHP-endorsed documents in ASHP's 
Best Practices for Hospital & Health-System Pharmacy. This compilation 
is updated annually, and provides guidance and direction to ASHP 
members and pharmacy practitioners and to other audiences who affect 
pharmacy practice.

    Academy of Managed Care Pharmacy (AMCP)

    The Framework for Quality Drug Therapy (http://www.fmcpnet.org/
index.cfm?p=132D8447)

    This uniquely designed self-assessment tool is intended to be used 
by individual pharmacists and other healthcare practitioners and by 
organizations of virtually any size, from a physician's office to a 
large corporate health plan. The interactive tool provides individual 
practitioners and organizations with an online step-by-step process to 
identify, evaluate and improve upon specific task, skills and functions 
that contribute to effective medication therapy management. By 
answering a series of questions contained in the interactive self-
assessment tool, the program helps identify drug therapy management 
areas ripe for improvement. The program then populates any one of three 
action plan templates chosen by the user. The action plan template 
provides a format for defining measurable goals, assigning 
responsibilities, identifying available resources, and tracking 
progress, thus beginning a continuous quality improvement process.

    Health Resources and Services Administration, Office of Pharmacy 
Affairs

    ``Patient Safety and Clinical Pharmacy Services Collaborative 
Change Package,'' (PSCS; version 11, August 1, 2008). The ``Patient 
Safety and Clinical Pharmacy Services Collaborative Change Package,'' 
is organized into strategies. Each strategy includes change concepts, 
each of which is accompanied by action items (e.g., ``assess 
organizational needs for quality . . .''). The Change Package also 
denotes links to current corresponding national initiatives, helpful 
tools and resources, and definitions relevant to the proposed material. 
The following is one illustrative strategy:
Strategies to Achieve Accountability for Results
    IV. Safe Medication Use Systems: Develop and operate by safe 
medication-use practices
Key Change Concepts for Improved Patient Safety and Clinical Pharmacy 
        Systems

    J.     Systematically introduce and institutionalize safe 
medication-use practices and monitoring procedures.

Suggested Action Items (Range from J1.-J11; Representative sample 
        below).

    J1.   Eliminate the practice of providing free samples, or 
establish a strict set of guidelines for acceptance and monitoring of 
samples based on a rational formula for the organization.
    J2.   Require double-checking, especially during the times when 
pharmacist is unavailable (e.g., develop and utilize policies requiring 
two nurses to verify the right drug when nurses access medication 
storage).
    J3.   Write notes in a standardized way based on locally developed 
guidelines shared among providers; for example, list ``do not use'' 
abbreviations on the medication form

    Institute for Safe Medication Practices (ISMP)

    ISMP Self-Assessments

    The Institute for Safe Medication Practices (ISMP) makes available 
to healthcare organizations several ISMP Medication Safety Self 
Assessments. These tools are designed to help healthcare organizations 
assess the medication safety practices in their respective institution 
surrounding the use of medication therapy, identify opportunities for 
improvement, and compare individual organizational experience with the 
aggregate experience of demographically similar organizations.
    The self-assessments contain items that address the use of 
medications in the clinical setting, many of which are on the ISMP list 
of high-alert medications. Many of the items included represent system 
improvements and safeguards that ISMP has recommended in response to 
analysis of medication errors reported to the USP-ISMP Medication 
Errors Reporting Program, problems identified during on-site 
consultations with healthcare organizations, and guidelines in the 
medical literature. Available Self Assessments include:

      Acute Care--ISMP Medication Safety Self Assessment for 
Hospitals

         2004 Self-assessment
         2000 Self-assessment
      Antithrombotic Therapy
      Bar Coding Assessment
      Community/Ambulatory Pharmacy
      Physician Practices
      ISMP Medication Safety Self Assessment for Automated 
Dispensing Cabinets

    Pharmacy Coalition Work Product

     1.  Principles of a Sound Drug Formulary System
    A coalition of national organizations representing healthcare 
professionals, government, and business leaders formed a working group 
(Including the Department of Veterans Affairs. See Appendix III) to 
develop a set of principles specifying the essential components that 
contribute to a sound drug formulary system. The Coalition was formed 
in September 1999 in response to the widespread use of drug formularies 
in both inpatient and outpatient settings and the lack of understanding 
about formularies among the public. The passage of Federal legislation 
providing a prescription drug benefit for Medicare beneficiaries also 
brought increased attention to the appropriate role and management of 
drug formulary systems within drug benefit programs. This document 
contains ``Guiding Principles'' that the Coalition believes must be 
present for a drug formulary system to appropriately serve the patients 
it covers. See: http://www.amcp.org/amcp.ark?p=AA8CD7EC
How The NCPIE Coalition Works to Meet its Mission

    NCPIE works to meet its mission to ``stimulate and improve 
communication of information on the appropriate use of medicines to 
consumers and healthcare professionals,'' through both in-house 
development and implementation of educational products or programs and 
through convening or participating in collaborative programs with both 
member and non-member organizations. Examples of both approaches 
include:
Dedicated/Recurring Event of Observance

      In October 1986, NCPIE conducted its first annual ``Talk 
About Prescriptions'' Month. The purpose of ``Talk About 
Prescriptions'' Month (TAP Month) is to help ensure that safe and 
appropriate medicine use through high-quality medicine communication is 
positioned as an important public health issue. TAP Month also provides 
NCPIE a regularly-scheduled platform for announcing new educational 
products, programs or services to promote its organizational mission. 
The theme for NCPIE's upcoming, 24th annual TAP Month, October 2009 is, 
Talk About Prescriptions: ``Communication is Key.''
Establish Key Partnerships

      In-house development, January 2002 launch, and ongoing 
implementation of ``Be MedWise'' to Promote Safe Use of Over-the-
Counter Medicines (www.bemedwise.org). NCPIE conceptualized this 
ongoing, Web-based public education campaign and invited the Food and 
Drug Administration and the American Pharmacists Association to 
participate in its launch at a national Press Club media briefing. Dr. 
Richard Carmona, M.D., MPH, FACS, U.S. Surgeon General, participated in 
a subsequent media briefing in September 2003 to expand the scope of 
the campaign. NCPIE also licenses content from the campaign to support 
two statewide collaborative programs, ``Be MedWise'' Tennessee, and 
``Be MedWise'' Arkansas. Lead State organizations are the Universities 
of Tennessee and Arkansas' Cooperative Extension Services, the 
University of TN College of Pharmacy and the Univ. of Arkansas College 
of Pharmacy.

Convene Expert Project Advisory Team

      Formulation of an external Project Advisory Team (PAT) to 
assist in the development, promotion, and dissemination of a turn-key 
educational workshop kit, ``Maximizing Your Role as a Teen Influencer: 
What You Can Do To Help Prevent Teen Prescription Drug Abuse.''. The 
PAT for this project, which will launch in October 2009 in conjunction 
with NCPIE's annual ``Talk About Prescriptions'' Month campaign 
includes representatives from 14 organizations.

       NCPIE also convened an external Project Advisory Team for the 
development, promotion, and 2007 launch of its ongoing online NCPIE 
program, ``Medication Use Safety Training for SeniorsTM 
(MUST for SeniorsTM).''
Participate in External Coalitions

      NCPIE currently participates in the following external 
coalitions or special projects:

           National Coordinating Council for Medication 
        Reporting and Prevention (NCC MERP)
           National Consumers League/Agency for Health Care 
        Research and Quality National Medication Adherence Public 
        Awareness Campaign
           Safe Medication Disposal for ME (Maine) Program--
        Member of project advisory team
           ``Follow Directions: How to Use Methadone Safely'' 
        Campaign Partner
           New England Health Care Institute (NEHI) medication 
        adherence improvement project
           Maryland State Board of Pharmacy Acetaminophen 
        Safety Campaign
           American Pharmacists Association Safe Use of 
        Acetaminophen Products Coalition

Use the Internet and (Pending) Use of Social Media

      NCPIE currently maintains or promotes four educational 
Web sites:

       www.talkaboutrx.org--primary site; home for ``Talk About 
Prescriptions'' Month;
       www.bemedwise.org--safe use of over-the-counter (OTC) medicines;
       www.mustforseniors.org--targeting older adults and caregivers;
       www.learnaboutrxsafety.org--targeting families, including older 
adults, caregivers, parents and children; developed collaboratively for 
The Center for Improving Medication Management (SureScripts) who own/
maintain the site.

      Upcoming campaign (online Tool Kit to address medicine 
abuse on college campuses) will include outreach via social media, 
including Facebook and Twitter).

    I would once again like to thank you for inviting me to testify 
before this Subcommittee. I appreciate the work of this Subcommittee on 
Oversight and Investigations of the House Committee on Veterans' 
Affairs. On behalf of all NCPIE member organizations I thank you for 
your trust in our ability to assist you with this important work. I 
look forward to answering any questions you might have.

                                 
       Prepared Statement of Solomon Iyasu, M.D., MPH, Director,
   Division of Epidemiology, Office of Surveillance and Epidemiology,
 Center for Drug Evaluation and Research, Food and Drug Administration,
              U.S. Department of Health and Human Services
INTRODUCTION
    Mr. Chairman and Members of the Committee, I am Dr. Solomon Iyasu, 
Director, Division of Epidemiology, within the Office of Surveillance 
and Epidemiology in the Center for Drug Evaluation and Research (CDER) 
at the Food and Drug Administration (FDA or the Agency), which is part 
of the Department of Health and Human Services (HHS). I am pleased to 
be here today to discuss FDA's role in identifying and communicating 
drug safety issues, as well as our collaboration with the Department of 
Veterans Affairs (VA). We will first discuss the importance of FDA drug 
regulation, including how the Agency manages drug safety issues and 
informs the public when drug safety concerns arise. We will also 
discuss some specific examples of how FDA and the VA have collaborated 
in furthering our mission to protect the public health and keep our 
drug supply safe.
FDA DRUG REGULATION
    FDA promotes public health through the regulation of prescription 
and over-the-counter drugs, which are an increasingly critical 
component in improving the health of many Americans. FDA is charged by 
Congress with the authority to review new drug applications for safety 
and effectiveness. FDA's drug review process is recognized worldwide as 
the gold standard, and we actively monitor the scientific bases for our 
processes to ensure that they reflect advances in medical science.
    Approval of a drug product is based on FDA's acceptance and review 
of data collected during the course of the drug's development, 
including the results of clinical trials, demonstrating that the drug 
is safe and effective for its intended use. At least half of the effort 
by FDA's premarket reviewers is dedicated to the assessment of safety. 
Major changes have taken place in how drugs are evaluated, including a 
complete evaluation of their metabolism, their interactions with other 
drugs, and potential differences of effectiveness or safety in people 
of different genders, ages, and races. In addition, FDA staff perform 
systematic assessments of safety that yield comprehensive reviews, 
focusing on the potential problems with the greatest clinical 
importance. Adverse reactions reported during the clinical trials of 
the drug are included in the labeling information, even if they 
occurred in a small number of individuals, so that health professionals 
are aware of the scope of the potential reactions and can advise their 
patients accordingly.
    All drug products contain risks as well as benefits, and it is 
often impossible to predict which individuals may have increased 
sensitivity to particular drugs. Before approving a drug, FDA takes 
into account the known risks associated with the drug, along with the 
benefits the drug will provide. FDA's responsibilities for oversight of 
the entire life cycle of drugs--from premarket drug testing and 
development through drug approval, postmarket surveillance, and risk 
management--have never been more important. No amount of premarket 
study can provide all of the information about effectiveness or all the 
risks of a new drug when it is used by the general population in the 
myriad ways not studied during clinical trials. As a result, FDA's 
postmarket drug safety program plays an essential role by collecting 
and assessing information about adverse events and medication errors 
identified after approval. A key role of our postmarket safety system 
is to detect serious unexpected adverse events and take definitive 
action when needed.
    Health professionals may observe differences from clinical trial 
results in both the incidence and/or types of adverse drug experiences. 
FDA is committed to improving the ability of healthcare professionals 
to predict which patients might experience adverse events with a given 
drug. FDA continuously seeks to provide the means for translating new 
scientific advances into benefits for patients (for example, biomarkers 
and pharmacogenomics) to take advantage of new ways to monitor the 
performance of marketed drugs, and to communicate this information to 
healthcare professionals and patients to help ensure the safe use of 
drugs.
    Another critical aspect to drug regulation is the safety of 
products imported into the United States. On July 1, 2008, FDA issued 
the ``Import Safety-Action Plan Update.'' The update outlines the 
significant progress FDA has made and the key steps that are planned 
for the future to enhance the safety of imported goods. FDA has taken 
strong enforcement actions, signed agreements with key trading 
partners, hosted bilateral and multilateral discussions, shared 
critical information on safety and best practices, and begun a process 
to improve safety practices, both inside and outside of government. FDA 
has increased its presence abroad by establishing offices in China, 
India, Europe, and Latin America at present. FDA is seeking to ensure 
that imported drug products are safe and effective prior to reaching 
U.S. ports of entry. Among other things, FDA is pursuing this goal by 
maximizing foreign product preapproval inspections, increasing FDA 
inspections, increasing the sharing and use of foreign competent 
authority inspection reports and other information, developing plans to 
use third-party certification, and providing technical assistance to 
countries that have less developed regulatory systems to ensure product 
safety.
    Below we will discuss how FDA manages drug safety issues in 
general, and we will highlight initiatives in place to further enhance 
FDA's postmarket drug safety monitoring program.
HOW FDA MANAGES DRUG SAFETY ISSUES
    Once FDA approves a drug, the postmarket monitoring stage begins. A 
drug manufacturer is required to submit regular postmarketing reports 
to FDA on its drug. These reports include critical information about 
adverse events associated with the use of one or more drugs. Reports 
are submitted in an expedited fashion for serious and unexpected 
adverse events, and periodically for other adverse events. 
Manufacturers submit several other types of postmarketing reports, 
including new clinical trial results. Also during this period, we 
continuously receive adverse event reports directly from the public, 
such as healthcare professionals and patients through our MedWatch 
program. Stored in a computerized database, these reports are reviewed 
and analyzed by FDA epidemiologists and safety evaluators to assess the 
frequency and seriousness of the adverse events and to determine their 
association, if any, with medication usage. An adverse event may occur 
because of simple or complex reasons, including drug exposure, an 
interaction between one or more drugs, other therapies, environmental 
factors, an individual's characteristics, and underlying diseases. Our 
response to information from this ongoing surveillance depends on an 
evaluation of the aggregate public health benefits of the product 
compared to its evolving risk profile.
    Decisions about regulatory action in response to evidence of a drug 
safety risk are complex, taking into account many factors. The actions 
taken depend on the characteristics of the adverse events, the 
frequency of the reports, the seriousness of the diseases or conditions 
for which the drug provides a benefit, the availability of alternative 
therapies, and the consequences of not treating the disease. As more 
becomes known about the potential risks or benefits of a drug, often 
its FDA-approved labeling will be revised so that it better reflects 
information on appropriate use. If labeling alone is inadequate to 
manage risks, additional actions may include revising drug names or 
packaging, issuing ``Dear Health Care Professional'' letters (sometimes 
referred to as ``Dear Doctor'' letters), disseminating educational/
special risk communications, requiring restricted distribution 
programs, or withdrawing a drug's approval.
HOW FDA COMMUNICATES ABOUT DRUG SAFETY ISSUES
    FDA uses a broad range of methods to communicate drug safety 
information to the public. Certain forms of communication are targeted 
to specific audiences (e.g., healthcare professionals or patients). 
Others are directed at more than one group to ensure widespread 
dissemination of information about important drug safety issues, 
including emerging drug safety issues. FDA continuously evaluates its 
communication efforts and modifies them to enhance their accessibility 
and effectiveness. We welcome public comment at any time, suggesting 
ways to improve our safety communications. The different types of drug 
safety communications are described in more detail below.
    Labeling. FDA-approved drug product labeling is the primary source 
of information about a drug's safety and effectiveness, and it 
summarizes the essential scientific information needed for the safe and 
effective use of the drug. Labeling for prescription drug products is 
directed to healthcare professionals but may include patient counseling 
information as well. For some prescription drugs, such as oral 
contraceptives and estrogens, FDA determined several years ago that the 
safe and effective use of these drugs required that additional labeling 
in nontechnical language be distributed directly to patients by their 
healthcare professional or pharmacist (Title 21 of the Code of Federal 
Regulations (CFR) 310.501 and 310.515). In addition, FDA may require 
Medication Guides, a type of patient-directed labeling, for products it 
determines pose a serious and significant public health concern (21 CFR 
208) as part of a risk evaluation and mitigation strategy (REMS). FDA-
approved patient labeling also may be provided by manufacturers for 
other drugs.
    Early Communications about Ongoing Safety Reviews. Since August 
2007, FDA has issued Early Communications about Ongoing Safety Reviews 
to keep healthcare professionals and the general public informed of 
postmarket safety issues that are currently being evaluated by FDA. 
Early Communications are issued at the beginning of FDA's assessment, 
prior to conclusive determination of the clinical or public health 
significance of the information under evaluation, and before a decision 
has been made about what regulatory actions, if any, should be taken. 
They reflect FDA's current analysis of available data concerning these 
drugs; posting the information as an Early Communication does not mean 
that FDA has concluded there is a causal relationship between the drug 
and the emerging safety issue. It also does not mean that FDA is 
advising healthcare professionals to discontinue prescribing these 
products. In general, Early Communications have included a time frame 
for when FDA anticipates completing the safety review and providing 
followup.
    Public Health Advisories (PHAs). FDA issues PHAs to provide 
information regarding important public health issues to the general 
public, including patients and healthcare professionals. For example, 
PHAs may highlight important safety information, inform the public 
about the completion of FDA's evaluation of an emerging drug safety 
issue, announce the implementation of methods to manage the risks 
identified for a marketed drug, or provide other important public 
health information.
    PHAs regularly include recommendations to mitigate a potential risk 
and often are issued in conjunction with other drug safety 
communications, such as Health Care Professional Sheets. PHAs related 
to drugs are available through CDER's Web site and disseminated via the 
MedWatch Partners Program.
    Health Care Professional Sheets. FDA issues Health Care 
Professional Sheets, which provide a summary of important and often 
emerging drug safety information for a particular drug or drug class. 
Health Care Professional Sheets begin with a summary ``Alert'' 
paragraph, followed by more detailed sections explaining the Alert, 
including clinical considerations or recommendations for the healthcare 
professional, information that patients should be made aware of and 
discuss with their healthcare professional, a summary of the data that 
were the basis for the recommendations, and, when applicable, 
implications of the Alert. Health Care Professional Sheets are intended 
to provide adequate factual information to address potential questions 
from patients and facilitate a healthcare professional's consideration 
of the drug safety issue.
    Other Methods of Communication. FDA continues to explore other 
methods of making its written communications more effective, as well as 
the use of other media such as podcasts, video broadcasts and 
conference calls, to disseminate drug safety information.
    Manufacturers also use various methods to communicate drug safety 
information. For example, a sponsor may distribute a ``Dear Health Care 
Professional'' letter to convey important information regarding a 
marketed drug. ``Dear Health Care Professional'' letters may be used to 
disseminate information regarding a significant hazard to health, 
announce important changes in product labeling, or emphasize 
corrections to prescription drug advertising or labeling.
INITIATIVES TO IMPROVE DRUG SAFETY
Drug Safety Oversight Board
    The Drug Safety Oversight Board (DSB or the Board) was established 
in 2005 to oversee the management of drug safety issues and 
communication to the public about the risks and benefits of medicines. 
The Board's responsibilities include conducting timely and 
comprehensive evaluations of emerging drug safety issues for healthcare 
professionals and patients, and ensuring that experts both inside and 
outside of FDA give their perspectives to the Agency. The DSB also 
makes recommendations regarding disputes over scientific data and 
implements drug safety policies. In addition to making FDA's decisions 
on drug safety more transparent, the Board is a means to assure the 
public and medical profession that guidance has not been unduly 
influenced by the pharmaceutical industry.
    The DSB oversees drug safety issues within FDA's CDER, and is made 
up of FDA and medical experts from other government health agencies and 
government departments, including the VA. Along with other FDA 
colleagues, I am a primary participant from the Office of Surveillance 
and Epidemiology (OSE), in addition to the OSE Director and my 
counterpart in OSE's Division of Pharmacovigilance. In addition to the 
VA, other Federal agency Board members include representatives from the 
National Institutes of Health, the Centers for Disease Control and 
Prevention, the Agency for Health Care Research and Quality, and the 
Department of Defense.
    As a result of its partnership with FDA on the DSB, the VA shared 
the results of its own analysis involving the pain reliever 
propoxyphene with FDA. Based on these data as well as other data, in 
July 2009, FDA took action to require manufacturers of propoxyphene-
containing products to strengthen the label emphasizing the potential 
for overdose when using these products, and to provide a medication 
guide to patients stressing the importance of using the drugs as 
directed. Among other things FDA is doing to further assess the safety 
of this product, the Agency is working with the VA to explore whether 
we can study how often the elderly are prescribed propoxyphene instead 
of other pain relievers and the difference in the safety profiles of 
propoxyphene compared to other drugs.
Other FDA/VA Collaborations
    Collaborations between the VA and CDER's Office of Surveillance and 
Epidemiology, as well as with other FDA Centers, enhance our 
understanding of postmarket safety issues occurring in FDA-regulated 
products.
    In January 2007, and again in 2008, FDA and the VA signed a 
Memorandum of Understanding (MOU) for sharing information to enhance 
postmarket surveillance efforts and other drug and vaccine safety 
projects. The goals of the collaboration are to explore ways to promote 
efficient use of tools and expertise for product risk identification, 
validation, and analysis and to build infrastructure and processes that 
meet shared needs for evaluating the safety, efficacy, and use of 
drugs, biologics, and medical devices.
    Also, in August 2008, FDA and the VA signed an InterAgency 
Agreement (IAA), which allowed FDA to provide funding to the VA for 
work on safety issues of mutual interest. The IAA allowed funding for 
personnel time and programming costs associated with analysis of VA 
data to explore questions of interest that were raised by FDA, but also 
of interest to VA. This agreement is currently in the process of being 
renewed for another year.
    In addition, CBER and the VA continue collaboration on the Vaccine 
Safety Adverse Event Tracking and Safety Pilot Project. The focus of 
this initiative is the influenza immunization pilot study in the 
Central Veterans Health Administration (VHA) Database which will track 
adverse events after administration of influenza vaccine in a cohort of 
approximately 1 million VHA patients. It is anticipated that an 
additional 900,000 more persons will be added to the Central Database 
(bringing the total number of persons in the cohort to 2 million) in 
October 2009.
    Also, the VA and FDA's CDRH are working together to better 
understand adverse events related to cardiac catheterization 
procedures. The VA has developed a workflow system that allows for the 
integration of adverse event data reporting for review and discussion 
at a later date. This information is then shared with CDRH at regular 
intervals. The VA and CDRH are developing ways to share information in 
a similar fashion for endoscopes.
Food and Drug Administration Amendments Act of 2007 (FDAAA)
    As you know, in September 2007, Congress passed FDAAA, which 
included new resources for medical product safety and new regulatory 
tools and authorities to ensure the safe and appropriate use of drugs. 
For example, under FDAAA, FDA can require drug sponsors to make certain 
safety-related labeling changes and conduct postmarketing studies and 
clinical trials instead of relying on voluntary actions. In addition, 
if FDA determines that a REMS--risk evaluation and mitigation 
strategy--is necessary to ensure that the benefits of a drug outweigh 
the risks of the drug, FDA can require manufacturers to submit a REMS 
when a drug comes on the market, or later if FDA becomes aware of new 
safety information.
Sentinel Initiative
    FDAAA requires the HHS Secretary to develop methods to obtain 
access to disparate data sources and to establish a postmarket risk 
identification and analysis system to link and analyze healthcare data 
from multiple sources. The Sentinel Initiative is FDA's response to 
this mandate. Its goal is to build and implement a new active 
surveillance system that will eventually use electronic health 
information to monitor the safety of all FDA-regulated products. On May 
22, 2008, FDA launched the Sentinel Initiative with the ultimate goal 
of creating and implanting the Sentinel System--a national, integrated, 
electronic system for monitoring medical product safety. The Sentinel 
Initiative is a long-term effort that must proceed in stages, and this 
effort is well under way. FDA is collaborating with the Federal and 
private sector in various activities that will inform the development 
of this system.
    In December 2008, FDA held a public meeting on the Sentinel 
Initiative to obtain input from stakeholders about the structure, 
function, and scope of the project. The Director for the Center of 
Medication Safety at the VA was among the participants at this day-long 
meeting, presenting on the issue of risk communication.
    As an initial step to creating the Sentinel System, FDA is 
initiating various pilot efforts to further the science of medical 
product surveillance. One of these pilots, known as Mini-Sentinel II, 
will include our Federal partners. We look forward to the VA's 
participation in this effort. The effort involves creating a 
distributed system that will focus on developing methodologies to 
obtain more information on emerging drug safety issues. Mini-Sentinel 
II is a small-scale effort to conduct the types of safety evaluations 
that FDA envisions doing on a larger scale with the Sentinel System. 
Medical product-adverse event pairs will be selected based on 
identification of priority safety issues from FDA's medical product 
Centers. Then a protocol for a query will be developed and agreed to by 
participating Federal partners. Subsequently, each participating 
Federal partner will perform the analysis in their database. The query 
will be translated into analytical code by the partner specifically 
developed and suited for the partner's database structure. Summary 
results of each Federal partner's analysis will be submitted to FDA for 
further consideration. Lessons learned from this pilot will inform the 
development of the Sentinel System.
    The Sentinel System will augment the Agency's current postmarketing 
surveillance tools and strengthen FDA's ability to ensure that safe and 
effective new drugs are available to the public and that the risks of 
marketed drugs are well understood.
CONCLUSION
    FDA has a critical role in the detection and management of safety 
issues that are identified after a drug is approved, including a 
critical role in communicating information to the public. Our goal, 
regardless of the communication tool employed, is to make the most up-
to-date drug safety information available to the public in a timely 
manner so that healthcare professionals and patients can consider the 
information when making decisions about medical treatment and be aware 
of uncertainties in the data. Our ability to fulfill our mission is 
enhanced by our partnerships with patients, physicians, pharmacists, 
industry, State regulators, and other Federal partners like the VA. 
Together we can help ensure the safe use of marketed drugs by providing 
the best possible information to the American public.
    Once again, thank you for the opportunity to testify before the 
Committee today. We are happy to respond to questions.

                                 
   Prepared Statement of Belinda J. Finn, Assistant Inspector General
        for Audits and Evaluations, Office of Inspector General,
                  U.S. Department of Veterans Affairs
INTRODUCTION
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to discuss systemic weaknesses impacting the Veterans 
Health Administration's (VHA) ability to accurately account for its 
inventories of non-controlled drugs in VHA medical facilities and 
consolidated mail outpatient pharmacies (CMOPs). We issued two recent 
Office of Inspector General (OIG) reports, Audit of VA Consolidated 
Mail Outpatient Pharmacy Inventory Accountability and Audit of Veterans 
Health Administration's Management of Non-Controlled Drugs, related to 
this issue. I am accompanied by Irene Barnett, Ph.D., Audit Manager, 
Bedford Office for Audits and Evaluations, OIG.
BACKGROUND
    VHA medical facilities and CMOPs dispensed about 126 million 
prescriptions for VA patients and spent $3.7 billion on pharmaceuticals 
in fiscal year (FY) 2008. Prescription drugs are generally categorized 
as controlled or non-controlled. Non-controlled drugs are not regulated 
under the Controlled Substances Act 1970 due to the reduced risk for 
abuse and addiction. Approximately 95 percent of the pharmaceutical 
spending was on non-controlled drugs. Also, non-controlled drugs are 
not subject to the same stringent inventory and oversight controls that 
controlled drugs are subject to, yet some non-controlled drugs are 
expensive, others contain active ingredients that can be used to 
manufacture illicit drugs, and some are considered to be at high risk 
of diversion given the high street value of the specific drug. Within 
VHA, prescription medications are generally dispensed directly to 
veterans by facility inpatient or outpatient pharmacies or by mail from 
a medical facility's pharmacy or a CMOP. The CMOPs spend about twice as 
much money on pharmaceuticals than VHA medical facilities. As part of 
our recent oversight of pharmaceutical inventories, we visited two of 
VHA's seven CMOP operations in Charleston, SC, and Dallas, TX, and six 
of VHA's medical facilities in Fayetteville, NC, New York, NY, Long 
Beach, CA, Wichita, KS, Seattle, WA, and Spokane, WA. In addition, we 
also analyzed the inventory records of over 30 VA medical centers.
    We reported VHA medical facilities and CMOPs could not accurately 
account for non-controlled drug inventories because of inadequate 
inventory management practices, recordkeeping, and inaccurate pharmacy 
data. VHA needs to improve its ability to account for non-controlled 
drugs to reduce the risk of diversion and standardize its pharmacy 
inventory practices among its medical facilities and CMOPs. Without 
improved controls, VHA cannot ensure its non-controlled drug 
inventories are appropriately safeguarded, nor can VHA accurately 
account for these expensive inventories.
FINDINGS
    VHA cannot accurately account for its non-controlled drug 
inventories because it has neither implemented nor enforced sufficient 
controls to ensure pharmacy inventory practices are standardized and 
pharmacy data is accurate. Furthermore, VHA does not currently require 
its facilities to monitor any non-controlled drugs on an ongoing basis.
    We found that both CMOPs and VHA medical facilities maintain 
inventory management controls and use systems of inventory control that 
rely upon annual physical counts of drugs. However, we identified 
significant weaknesses in how well the facilities perform physical 
counts and adjust inventory records.
Inadequate Inventory Controls Led to Significant Inventory Variances
    VHA Handbook 1761.2, VHA Inventory Management, requires that an 
annual wall-to-wall physical inventory be performed for all items. In 
addition, VHA's Pharmacy Inventory Guidelines state that inventory 
quantities of an open product should be estimated to the nearest tenth 
of a bottle. The CMOPs did not perform complete annual physical counts 
for all items, as required and inconsistently estimated their inventory 
quantities of open products. Additionally, the inventory management 
system used by most CMOPs does not always track drug dispensing. CMOP 
personnel physically count all drugs that are manually dispensed, but 
they do not count all drugs dispensed from individual pill dispensers 
because they considered the physical count of open products to be too 
labor intensive.
    We performed inventory analyses at two of VA's seven CMOPs 
supporting operations nationwide and identified pill variances ranging 
from a negative variance of 3,092 pills to a positive variance 192,498 
pills. The existence of these variances demonstrated the unreliability 
and inaccuracy of the CMOPs' inventory records. Further, 14 of 18 
pharmaceutical items that we reviewed had positive variances. These 
variances can enable and mask a deliberate diversion and loss of drugs. 
CMOP personnel were unable to explain the positive or negative pill 
variances between the actual pill counts and the amounts we computed as 
the ending inventory. However, they indicated the variances might be 
the result of the inventory management system inaccurately tracking 
dispensed pills and because annual wall-to-wall physical inventories 
were not completed for all drugs.
    Physical inventories performed within VA medical facilities did not 
provide adequate accountability for non-controlled drugs. VHA requires 
pharmacy managers to verify that physical inventories are conducted 
completely and accurately by conducting random checks of at least 25 
items. None of the pharmacy managers at the six VHA medical facilities 
we visited were able to demonstrate compliance with this requirement. 
In fact, we also found that three VHA facilities had not conducted 
annual physical inventories in 2007 and one did not complete the annual 
physical inventory in 2008 by the deadline.
    VHA pharmacy managers at 9 of the 31 facilities reported that 
pharmacy personnel are not consistently entering information on 
quantities of drugs transferred to secondary locations, such as an 
emergency room or inpatient ward, into the Veterans Health Information 
System and Technology Architecture (VistA). This results in incomplete 
information and may explain the negative inventory discrepancies we 
calculated for selected drug items at many facilities. Dispensing data 
on non-controlled drug inventories will be understated at facilities 
where pharmacy personnel are not consistently and accurately entering 
information on drug transfers in VistA.
    We were particularly concerned about negative inventory 
discrepancies we identified for at least one drug of the five selected 
for testing at all 31 VHA medical facilities. Negative inventory 
discrepancies reflect an ending inventory that was lower than it should 
have been given the quantities of drugs purchased and dispensed by the 
facility. We estimated that the 31 medical facilities were unable to 
account for about 380,000 pills, or 8 percent of their total available 
inventory. We considered the inventory variances to be significant.
    Physical inventories act as a check on the effectiveness of other 
inventory controls. While VHA requires its facilities to conduct annual 
physical inventories of non-controlled drugs, it does not ensure 
inventory data is accurate or use the data as a tool to identify drug 
loss or possible drug diversion. We identified multiple weaknesses in 
VHA's annual physical inventories of non-controlled drugs. For example, 
VHA does not require facilities to maintain their annual physical 
inventory reports for a certain time or record inventory results in a 
standardized electronic format that could enable a centralized analysis 
of inventory information. According to VHA officials, the current VistA 
system cannot provide information to account for a facility's inventory 
accurately because it lacks the capability to maintain a perpetual 
inventory.
    Other inventory management practices were also reducing the 
integrity of available inventory management information. For example, 
CMOPs did not have a policy for controlling and monitoring adjustments 
to drug inventory records. When CMOPs conduct a physical count for a 
particular drug and a variance exists between the physical count and 
the system balance, CMOP personnel simply adjust the inventory system 
balance so that the inventory balances correspond to actual physical 
counts. Individuals can make an unlimited number of adjustments in any 
quantities. Further, CMOP management was not verifying adjustments made 
to drug inventory balances.
    CMOPs did not adequately secure, track, and monitor non-controlled 
drugs being held for return credit or consistently comply with existing 
VHA policies. We identified instances where CMOP staff did not maintain 
a record of non-controlled drugs held for return, or reconcile credits 
received to the list of non-controlled drugs returned. VHA Directive 
2008-021, Monitoring of Non-Controlled Substance Medication Returns, 
requires non-controlled drugs held for return credit to be secured, 
tracked, and monitored to reduce the possibility of fraud and maximize 
revenues received through drug returns.
    We found that physical security controls were in place to prevent 
the unauthorized physical removal of pharmaceuticals at the two CMOPs 
we visited. However, we identified security weaknesses in CMOP 
inventory information systems. For example, we identified 61 users at 
the two CMOPs we visited whose inventory management system access 
allowed them to order, receive, and adjust non-controlled drug 
inventories. Inventory management system controls were not effectively 
tracking system user activity to determine if an employee had used all 
three permissions that allowed users to order, receive, and adjust 
against the same drug.
    Further, CMOP inventory information systems were also at increased 
risk of inappropriate alterations because generic user accounts enabled 
employees to order a drug through the ordering system without being 
identified as a specific user. The same employee could then use their 
unique ID and password to reduce the inventory balance and divert the 
drug.
Drug Transactions Not Accurately and Consistently Recorded
    VHA has established some procedures regarding the use of VistA to 
record drug transactions; however, controls are not in place to ensure 
that accurate and complete information on drug transactions is 
captured. For example, we found that local pharmacy personnel are not 
consistently recording information in VistA on transactions such as 
pharmacy stock transfers and drug returns. Prescription labels can be 
reprinted when an original label is damaged although the reprint 
function in VistA should not generally be used to dispense drugs. Some 
dispensing data may be incomplete because pharmacy personnel are 
inappropriately using the label reprint function in VistA to dispense 
drugs. These practices negatively impacted the reliability of inventory 
information.
    Pharmacy personnel from six medical facilities we visited are using 
the reprint function to dispense drugs to patients, which can affect 
the accuracy of drug dispensing captured in VistA. The VistA 
application lacks adequate controls to track why a reprint label is 
being generated or to ensure that the function is being appropriately 
used. Further, VistA captures the quantity of drugs dispensed using the 
reprint function only if the original prescription was not released to 
the patient. Without procedures to standardize the use of the reprint 
function and to capture data on drug transfers, accountability of drug 
inventories is compromised.
    VHA facilities are not consistently capturing information on the 
quantities of drugs originally dispensed and then returned to inventory 
for reuse. Pharmacy managers at VHA facilities told us some personnel 
are returning drugs to inventory without adjusting inventory records in 
VistA, which inflates a facility's dispensing data. We calculated a 
positive inventory discrepancy for at least one drug at 24 of 31 VHA 
medical facilities where we specifically analyzed inventory 
information. We estimated that these facilities had an excess of about 
87,000 pills--or 10 percent--available to dispense. These pills are 
available to dispense or divert since they do not exist according to 
the inventory records.
    The VHA Directive 98-020, Drug Accountability Software, which 
required facilities to monitor at least 20 non-controlled drugs for 
possible diversion, expired in 2003. At the time of our audits, VHA had 
not provided facilities with technical guidance on how to monitor non-
controlled drugs on an ongoing basis to detect diversion, or taken 
steps to improve the usefulness of its annual physical inventory 
information.
    Most pharmacy managers in VHA medical facilities reported that they 
monitor at least one non-controlled drug for diversion on an ongoing 
basis, with most monitoring one to five drugs. Typical action includes 
comparing data on drug purchasing and dispensing to identify 
unaccounted for drugs. The willingness to monitor certain non-
controlled drugs in the absence of VHA policy is a positive action. 
However, over one-third of pharmacy managers reported that they lack 
adequate information to monitor non-controlled drugs for diversion. 
Given the number of high-risk non-controlled drugs medical facilities 
maintain in stock, VHA needs to identify certain high-risk drugs that 
should be monitored and provide facilities with guidance on how to 
monitor and safeguard these drugs on an ongoing basis.
    Overall, both VHA's VistA and CMOP inventory management software 
require improvements to allow medical facilities and CMOPs to better 
account for pharmacy inventory. In 2003, VHA initiated the Pharmacy Re-
engineering project to make improvements to VistA. The project was 
slated for completion in 2005, but this project has experienced 
significant delays. Current schedule projections are that the project 
may not be completed until 2014. Since needed upgrades may take years 
to be fully implemented, it is vital that VHA take more immediate 
action to improve accountability over non-controlled drug inventories.
CONCLUSION
    With pharmaceutical expenditures exceeding $3.7 billion in FY 2008 
and future costs expected to increase, VHA needs accurate inventories 
and strong recordkeeping to account for non-controlled drug 
inventories. OIG audits reported large variances in the amount of non-
controlled drugs at VHA medical facilities and CMOPs and concluded that 
VHA does not have reliable inventory information that could detect the 
loss or unauthorized diversion of drugs. The implementation and 
enforcement of inventory controls to provide accurate and complete 
information is imperative to VHA's ability to account for, manage, and 
safeguard non-controlled drugs.
    We recommended the Under Secretary for Health take actions to 
improve accountability over non-controlled drugs, including:
      Enforcing requirements for conducting annual wall-to wall 
inventories.
      Ensuring annual physical inventory reports are reasonably 
accurate and pharmacy managers are held accountable for the accuracy of 
annual inventories.
      Developing policy and establishing controls to monitor 
and control adjustments to drug inventory records.
      Enforcing compliance with the policy for returned drugs.
      Establishing procedures that restrict a single user from 
ordering, receiving, and adjusting against the same drug and removing 
generic user IDs and passwords.
      Developing procedures to identify high-risk non-
controlled drugs and requiring pharmacy managers to monitor those 
drugs.
      Developing appropriate internal controls to ensure 
information on drug dispensing, drug transfers, and drug returns is 
accurately and consistently recorded in VistA.
      Limiting access to the VistA label reprint function to 
appropriate pharmacy personnel.
    The Under Secretary for Health agreed with our findings and 
recommendations to improve accountability over non-controlled drug 
inventories. VHA provided acceptable implementation plans to address 
the recommendations. We will followup on the implementation of actions 
to address the report recommendations.
    Mr. Chairman, thank you for the opportunity to discuss these 
important issues. We would be pleased to answer any questions that you 
or other Members of the Subcommittee may have.

                                 
        Prepared Statement of Michael A. Valentino, R.Ph., MHSA,
   Chief Consultant, Pharmacy Benefits Management Services, Veterans
       Health Administration, U.S. Department of Veterans Affairs
    Mr. Chairman, Ranking Member, and Members of the Committee: thank 
you for providing me this opportunity to discuss the Department of 
Veterans Affairs' (VA) Pharmacy Benefits Management Services (PBM) 
program, including our national Formulary and patient safety 
initiatives. I am accompanied today by Dr. Chester B. Good, Chair of 
the VA Medical Advisory Panel and Dr. Paul Tibbits, Deputy Chief 
Information Officer for Enterprise Development.
    Drug therapy is an essential component to quality preventative, 
curative, and post-operative healthcare. Each Veteran enrolled in the 
VA healthcare system is eligible to receive prescription medications, 
over-the-counter medications, and medical and surgical supplies under 
VA's comprehensive medical benefits package. Generally, these 
pharmaceuticals must be prescribed by a VA provider and are made 
available via the VA National Formulary process. In 2008, VA provided 
approximately 126 million outpatient prescriptions to more than 4.4 
million patients. Our error rate for these prescriptions is very low; 
less than 1 in every 294,000. I can confidently say that VA is meeting 
the pharmaceutical needs of Veterans and that we are striving every day 
to provide even better care to more of America's heroes. My testimony 
will describe how VA manages pharmacy benefits, the offices and 
procedures we have in place to ensure Veterans receive safe and quality 
care, and discuss VA's National Formulary. Before concluding, my 
statement will also provide information on VA's recently initiated 
Medication Reconciliation program.
Pharmacy Benefits Management
    VA's Pharmacy Benefits Management (PBM) program works to enhance 
the clinical outcomes and improve the health of Veterans through the 
appropriate use of pharmaceuticals. PBM provides leadership and 
governance for pharmaceutical activities and professional pharmacy 
practice in the Veterans Health Administration (VHA) and provides 
advice and support regarding pharmaceutical issues to Veterans, the 
Under Secretary for Health, field directors, and pharmacy staff across 
the system. The PBM organization consists of six primary specialty 
areas: the Clinical Informatics section; the Consolidated Mail 
Outpatient Pharmacy (CMOP) program; Adverse Drug Event Reporting (VA 
ADERS); Emergency Pharmacy Services (EPS); VA National Formulary (VANF) 
management; and the VA Center for Medication Safety (VA MedSAFE).
Clinical Informatics
    The PBM Clinical Informatics section provides operational oversight 
to the information systems used by PBM and all pharmacy operations 
nationwide. This section plans and establishes the mechanisms by which 
VA meets general program goals for developing and maintaining a 
nationwide pharmacy information system--the Pharmacy Re-Engineering 
(PRE) project. The VA PRE project being executed by the VA Office of 
Information and Technology will provide a system to enhance patient 
safety and encourage the appropriate use of pharmaceuticals by 
providing streamlined decision-making information to clinical staff in 
an integrated fashion.
    PRE will provide a flexible technical environment to adjust to and 
standardize future business conditions while meeting the dynamic needs 
of the clinical environment. This system will improve major 
functionalities, including medication order checks, and will provide 
prescribers with access to pharmacy knowledge systems that can reduce 
the potential for adverse drug events, improve efficiency by 
streamlining order processing and dispensing, reduce inventory costs 
and improve inventory accountability by providing automated tools to 
track inventory, and improve patient outcomes through medication 
utilization reporting and monitoring. Our focus, as always, is on the 
Veteran, and this PBM program provides robust decision support and 
patient safety features.
    An example of how PRE will be used to improve operations is 
demonstrated by the finding of the Department of Veterans Affairs 
Office of the Inspector General (OIG) report 08-01322-114 dated June 
23, 2009, that reviewed VHA's management of non-controlled drugs. The 
report states that, ``VHA cannot accurately account for its non-
controlled drug inventories because it lacks effective controls and 
reliable information to do so.'' PRE would assist VA in providing more 
effective controls. Until automated inventory management tools are made 
available through PRE, PBM is addressing the OIG findings by educating 
field staff and developing guidance specific to OIG's recommendations. 
These interim measures include conducting training on existing 
requirements, implementing tracking requirements for a sample of high 
cost/high risk drugs as recommended by OIG, and establishing triggers 
that warrant focused reviews.
Consolidated Mail Outpatient Pharmacy
    There are seven VA CMOP facilities in the National VA CMOP system. 
These facilities are located in Charleston, SC; Dallas, TX; Hines, IL; 
Leavenworth, KS; Murfreesboro, TN; Chelmsford, MA; and Tucson, AZ. 
Together, they interactively provide pharmaceutical support services to 
VA healthcare facilities located within defined respective CMOP service 
areas throughout the United States. These service areas include the 21 
Veterans Integrated Service Networks (VISN's) in the VA healthcare 
system, the Civilian Health and Medical Program for the Department of 
Veterans Affairs (CHAMPVA), and the Department of Defense's (DoD's) 
Naval Medical Center in San Diego, CA. CMOPs support VA's healthcare 
mission through advanced automated production technologies to dispense 
and mail prescriptions to eligible Veterans. This ensures each Veteran 
receives his or her prescriptions in the most timely, accurate and cost 
effective manner as possible. Three of five CMOP performance metrics 
currently exceed six sigma performance.
    VA's OIG Report 09-00026-143, dated June 10, 2009, reviewed CMOP 
contract management. The report found that, ``. . . the National CMOP 
Office generally complied with Federal and VA acquisition requirements 
when developing, competing, and monitoring contracts . . .'' In 
addition, the OIG auditors ``. . . found no evidence of contract 
overpayments through (their) review of contract charges where 
documentation was available . . .'' However, opportunities for 
improvement exist in a number of areas.
    Until 2007, each CMOP director was responsible for acquiring the 
services and supplies the CMOP needed. CMOPs obtained contracting 
support primarily from local VISNs or VA medical centers. In 2007, PBM 
initiated significant changes in CMOP acquisition management. The 
National CMOP Office added a contracting and logistics section and 
centralized contracting. Each CMOP also hired a logistics manager to 
strengthen purchasing and inventory controls at the CMOP level. In 
December 2008, under the terms of a Memorandum of Understanding (MOU) 
between PBM and the VA Office of Acquisition and Logistics' National 
Acquisition Center (NAC), the National CMOP Office transferred the 
responsibility and staff for all CMOP contracting to the NAC.
    The National CMOP Office has established a management review 
process for determining CMOP contract needs and evaluating the cost-
effectiveness of procurement alternatives. A process and policy have 
been issued and the PBM Associate Deputy Chief Consultant for CMOP 
oversees the process. The NAC has procedures to assure compliance with 
the Federal Acquisitions and VA Acquisition Regulations. The CMOP has 
increased the number of trained Contracting Officers Technical 
Representatives (COTRs) from 37 to 75 to provide better contract 
oversight and ensure contractor performance. These changes will 
strengthen CMOP contract management and oversight functions and address 
findings in the OIG report.
Adverse Drug Event Reporting
    Post-marketing drug surveillance is vital to reporting adverse drug 
events (ADEs) to the Food and Drug Administration (FDA) and VHA. A 
cornerstone of this approach is collecting and evaluating reports of 
ADEs through voluntary reporting by healthcare professionals. The 
safety profile of any drug or pharmaceutical evolves over time as new 
information is discovered when healthcare providers offer it to larger 
populations and sub-groups not previously studied during clinical 
trials. Because the electronic medical record is able to link 
prescription data to clinical outcomes at the patient level, VA is 
uniquely able to identify and track drug safety issues. VA has the only 
national system for electronic reporting of ADEs through its innovative 
VA Adverse Drug Event Reporting System (VA ADERS). By analyzing this 
computerized database, VA is able to identify drug safety signals, 
assess significance of external drug safety issues in our own patients, 
and track trends of known drug safety issues almost instantaneously.
Emergency Pharmacy Services
    The Emergency Pharmacy Services section is responsible for 
procuring, storing, and maintaining emergency pharmaceutical and 
medical or surgical supply items for the VA Pharmaceutical Cache 
Program. This section works closely with the VA Office of Public Health 
and Environmental Hazards' Emergency Management Strategic Healthcare 
Group to ensure activation readiness of emergency supplies at VA 
Medical Center storage sites nationwide. In addition to maintaining 
VA's emergency pharmaceutical capabilities, Emergency Pharmacy Services 
staff can deploy VA's Mobile Pharmacies to provide local support in 
cases of national emergencies, such as a hurricane or other event, or 
in response to a pandemic disease, under the guidelines of VA's 
emergency response plan to ensure continuity of care and supplies to 
Veterans, no matter the circumstances.
National Formulary Management
    In 2009, VA consolidated all of its formularies into a single VA 
National Formulary (VANF). The PBM office in Hines, Illinois, is the 
organizational entity responsible for coordinating the development, 
maintenance, and implementation of the VANF. Two groups, the VA Medical 
Advisory Panel (MAP) and the VISN Pharmacist Executives (VPE) Committee 
actively manage the VANF. The MAP provides clinical oversight of the 
formulary process and is comprised of practicing VA physicians, PBM 
clinical pharmacists and a physician from DoD. The VPE Committee is 
comprised of senior VISN pharmacists who represent each VISN Formulary 
Committee, a pharmacist from the Indian Health Service, and pharmacists 
from DoD; it provides both clinical and operational oversight of the 
formulary process.
    PBM pharmacists support the MAP and VPEs by monitoring the medical 
literature, scientific research and VA outcomes data to identify 
evidence that may support adding drugs to or deleting drugs from the 
VANF and by drafting evidence-based prescribing guidance. VA develops 
guidance on the pharmacologic management of common and high-cost 
diseases and collaborates with clinical experts within the Department 
to develop or refine guidance when necessary. VA disseminates the 
guidance throughout the Department for peer-review prior to being 
presented to the MAP and VPEs for consideration. PBM has also developed 
mechanisms for system-wide collection, analysis, trending and reporting 
of ADEs.
    PBM is also responsible for developing strategies for including a 
drug class under a National Contract and monitoring trends regarding 
product utilization with Pharmaceutical Prime Vendor purchases. 
Pharmacists from DoD, VA, the Indian Health Service, and the Bureau of 
Prisons discuss drug classes with potential for joint national 
contracting. VA representatives meet with manufacturers for selected 
drug classes and develop solicitation requirements for use by VA's NAC. 
PBM reviews manufacturer incentive proposals, coordinates price and 
clinical information as well as contractor performance when considering 
renewal options for multiyear contracts, and collaborates with VA 
contracting officers, counsel, acquisition review, and VA field 
personnel regarding contract issues.
    VA's Formulary Management Process is stipulated in VHA Handbook 
1108.08, ``VHA Formulary Management Process,'' which was last updated 
on February 26, 2009. This document provides guidance to the Deputy 
Under Secretary for Health for Operations and Management, VA's MAP, the 
PBM Chief Consultant, VISN Directors, VISN Pharmacist Executives, 
Facility Directors, Facility Pharmacists, and VA prescribers.
VA Center for Medication Safety (VA MedSAFE)
    PBM strives to ensure that Veterans receive the right medication, 
in the right dose, at the right time. VA's efforts for safe medication 
use are supported by the Computerized Patient Record System (CPRS), 
electronic medication order entry, automated prescription fulfillment, 
and the Bar Code Medication Administration (BCMA) system. The 
electronic health record (EHR) currently provides automated checks for 
allergies and possible drug interactions, further improving patient 
safety and care. VA's Center for Medication Safety (VA MedSAFE) is a 
national, comprehensive pharmaco-vigilance program that emphasizes the 
safe and appropriate use of medications. VA MedSAFE utilizes different 
methods and tools, including passive and active surveillance, to 
continuously monitor for potential ADEs, including the use of VA ADERS 
as previously described.
    An ADE is defined as an unintended effect of a drug that occurs 
secondary to drug administration. In many instances, VA MedSAFE 
directly and promptly notifies providers across VA's healthcare system 
if patients are at risk through its Risk Reduction efforts. VA, DoD and 
FDA have a MOU that allows close collaboration on specific post-
marketing surveillance efforts and other drug and vaccine safety 
projects. These efforts are conducted through FDA's newly established 
Sentinel Initiative and its Office of Surveillance and Epidemiology's 
Center for Drug Safety and Epidemiology Research. Medications and 
prescriptions are essential to effective healthcare management, but 
inaccuracies can have severe repercussions.
    Evaluating preventable ADEs, providing interventions to decrease 
preventable ADEs, and educating the field on best practices reduce the 
likelihood of ADEs occurring. By conducting and promoting medication 
safety projects at the regional and national levels, VA provides safe 
and effective pharmaceutical care to Veterans. Through the national 
roll-up system and data analysis provided by VA MedSAFE, each facility 
and VISN can benchmark themselves against national trends. We are 
unaware of any other healthcare system with as robust and well-
developed a system for tracking, assessing and acting on drug-related 
safety issues within their patient population.
    VA provides consumer medication information sheets on each new and 
renewed prescription. VA is highly engaged with patient education on 
medications, with local medical centers developing policy for teams of 
clinicians to provide medication education, involving physicians, nurse 
practitioners, physician assistants, clinical pharmacy specialists, 
pharmacists, nurses, and other allied healthcare providers. Clinical 
Pharmacy Specialists and clinical pharmacists are key members of the 
healthcare team and can assist in optimizing drug therapy and improving 
medication safety for outpatients.
    Medication Reconciliation, a Joint Commission National Patient 
Safety Goal, is a process which mitigates the risk of ADEs that occur 
at transitions of care. It does this by addressing discrepancies 
between a patient's accounting of his or her medication use and the 
medication lists in the medical record every time a medication is 
dispensed, changed, or added to the medication regiment. There are many 
barriers to implementation including interoperability, software 
development, staff and organization adoption, and a changing Joint 
Commission National Patient Safety Goal.
    The VA Medication Reconciliation Initiative, launched in December 
2008, is tasked with facilitating safe, high quality, effective, and 
above all, Veteran-centered medication reconciliation throughout the VA 
system. This multidisciplinary effort includes a VA Medication 
Reconciliation Toolkit, Educational Video, Facility Monitor, External 
Peer Review Process, and patient informational Web site called 
``Medications: Play it Safe!'' on the My HealtheVet Web site. This 
initiative's workgroups continue to improve patient and staff resources 
and tools to improve documentation and monitoring of this process. In 
the coming months, we will continue to bring together VA innovators 
with those in DoD and the private sector to establish a world-class 
medication reconciliation program for Veterans and to provide guidance 
for this challenging endeavor.
Conclusion
    Mr. Chairman, VA has developed a remarkable pharmacy benefits 
management system that provides Veterans safe and effective medication 
to improve their healthcare. Our National Formulary is based on the 
best clinical research and leverages the size of our patient population 
and Department to procure medications at a low cost. Thank you again 
for the opportunity to testify. My colleagues and I are prepared to 
answer your questions.

                                 
   Statement of American Federation of Government Employees, AFL-CIO
    The American Federation of Government Employees (AFGE) appreciates 
the opportunity to present its views on veterans' pharmaceutical needs. 
AFGE represents approximately 180,000 employees in the Department of 
Veterans Affairs (VA), more than two-thirds of whom are Veterans Health 
Administration (VHA) professionals on the frontlines treating the 
physical and mental health needs of our veteran population.
Recruitment and Retention of VA Pharmacy Workforce
    VHA ranks pharmacists third among the top ten occupations as 
national priorities for recruitment and retention. (See VHA's Workforce 
Succession Strategic Plan for FY 2008-2012, page 30). According to the 
VA's exit survey (page 34), career advancement is the most common 
reason for pharmacists to leave the VA, followed by compensation.
    VHA, the Bureau of Labor Statistics and other public and private 
sources project a growing shortage of pharmacists nationwide due to 
employment growth, resignations and retirements. In order for VHA to 
effectively compete with other employers in the face of this worsening 
pharmacist shortage, it needs to ensure that all local facilities 
properly use special salary rates and other recruitment and retention 
incentives.
    AFGE commends VHA for recent efforts by some medical center 
directors to address advancement and compensation barriers with 
national salary surveys, bonuses and other recruitment and retention 
incentives. However, whether any benefits of these national initiatives 
accrue to the individual pharmacist depends largely on the discretion 
of the local facility director. As a result, in a number of facilities, 
VA pharmacist salaries are significantly below salaries offered by 
other local employers.
    Therefore, each facility should be required to align pharmacist 
salaries closely with national surveys and third party data, and update 
these salaries at least annually.
    To retain older, experienced pharmacists, VHA should reevaluate its 
current policy of appointing new pharmacists with limited or no 
experience at a GS-12 level. These appointments are not supported by 
the Hybrid Title 38 qualification standards for pharmacists and hurt 
morale among more experienced pharmacists. VHA policy makes clear that 
qualification standards are not intended to address salary issues. 
Rather, VHA has various pay authorities, such as retention incentives, 
special salary rates and bonuses; because VHA is slow to utilize these 
pay authorities to react to community practice, chiefs of pharmacy are 
forced to upgrade pharmacists instead.
    VHA should also evaluate the widespread practice of restricting 
certain positions to Doctors of Pharmacy (``PharmDs''). The pharmacist 
qualification standards give equal credit for education and experience. 
Unfortunately, some managers are unwilling to adequately credit 
experience despite these clear standards. The justification that 
managers rely on to require PharmDs is flawed, i.e. they contend that 
the VA Clinical Pharmacist position is comparable to positions in 
private sector retail establishments. However, they are not comparable; 
private sector clinical pharmacists more typically work ``24/7'' and 
weekend schedules.
    With regard to Pharmacy Technicians, VA needs to increase the 
number of GS-6 positions for certified employees. Currently, management 
is not required to promote to a GS-6 because under the Pharmacy 
Technician qualifications standards, a GS-6 is above the ``full 
performance'' level.
    VA should consider adding a requirement that all Pharmacy 
Technicians pass the Technician Certification (PTCB) test to be 
promoted to the GS-6 level. Certification requirements are prevalent in 
the private sector. Certification was part of the original intent of 
the Subject Matter Experts who developed the Pharmacy Technician 
qualification standard, and certification was also the understanding of 
the Hybrid Title 38 Collaboration Team and many of the members of the 
Professional Standard Boards. In addition, VA needs to republish the 
qualification standards allowing those who attain certification to be 
at the journeyman level. Having employees attain certification status 
and not be rewarded for this achievement is disheartening to say the 
least.
Pharmacy Staffing
    Many AFGE members report inadequate staffing at their pharmacies. 
As a result, both pharmacists and pharmacy technicians are requested to 
work overtime on a regular basis. Pressure to work overtime on a 
prolonged basis can hurt workplace morale, increase risks to patients 
and is more costly to the taxpayer than expanding the workforce.
    Understaffing can also have wider ramifications. For example, the 
Minneapolis VAMC has one of the busiest VA chemotherapy departments in 
the country. The facility recently built a chemotherapy satellite 
pharmacy that complies with new OSHA/NIOSH ``negative pressure'' 
regulations for preparing chemotherapy that were intended to reduce the 
risk of harmful exposure of IV room staff to hazardous substances. Even 
though the satellite was completed over a year ago, management has not 
filled the pharmacy department's request for an additional technician 
who is needed to work in the satellite, citing budget constraints. As a 
result, the facility has still not moved chemotherapy preparation to 
this satellite, and staff continues to prepare chemotherapy in a 
positive pressure room in violation of the new regulations.
    Short staffing also limits the ability of the pharmacy workforce to 
comply with the large number of VA directives that are issued on a 
regular basis to improve patient care.
    Another AFGE member reported that at her facility, the pharmacy 
does not have a triage pharmacist on staff that could extend 
maintenance medications until the next primary care appointment if the 
patient runs short.
    AFGE members also expressed concern about the large number of 
pharmacists who only have clinical duties. In contrast, pharmacy 
production and verification functions, which involve extensive 
requirements for providing medications to patients, remain short 
staffed.
Other Comments

    CMOPs

    AFGE urges this Subcommittee to encourage the replication of best 
practices of ergonomic interventions in place at some Consolidated Mail 
Outpatient Pharmacies (CMOP's) to other CMOPs and hospital outpatient 
verification high production areas.

    Formularies

    AFGE pharmacist members expressed concern about the unintended 
impact of performance measures related to cost savings. In order to 
meet Performance Measures, facilities often switch medications from a 
drug in one class to another drug in the same class or a similar class. 
Frequent switching frustrates and confuses our veterans. It is also 
perplexing to staff why VHA allows so many deviations to the formulary 
by pharmacy benefit managers at the VISN level.
    Members also pointed out problems that result from other hospital 
units using different products than the pharmacy. For example, the 
pharmacy formulary allows the use of one type of nutritional supplement 
for veterans who are outpatient, while the dietetic service has a 
separate contracting process and therefore uses another product for 
inpatient care. As a result, when a veteran changes from inpatient to 
outpatient status, there are continuity of care problems. Similarly, 
many of the wound care/dressing supplies provided by Supplies, 
Processing and Delivery (SPD) on an inpatient basis are different than 
those supplied by the pharmacy for outpatients. This also leads to 
confusion and coordination problems for clinicians and patients.

    Information Technology

    Members indicated a need for a number of IT upgrades; for example, 
it would be helpful to upgrade the VA intravenous (IV) package/IV 
labeling, and also to have IV pumps that could download infusion data 
into the computerized patient record system.

    Patient Safety

    AFGE urges increased oversight of the medication reconciliation 
process. The Center for Patient Safety should look closely at VHA's 
difficulties in complying with Joint Commission (JCAHO) performance 
criteria in this area, and the adverse impact of noncompliance on other 
inpatient staff members.
    A pharmacist on another facility expressed concern about the 
practice of allowing contract nurses from the state nursing homes, 
rather than the veteran's treating physician, to make requests for 
medication refills without any accountability.
    AFGE thanks the Subcommittee for the opportunity to provide input 
into this issue.

                                 
                    Statement of Hon. Cliff Stearns,
         a Representative in Congress from the State of Florida
    Thank you Mr. Chairman. I appreciate your holding this hearing to 
examine the management of the Department of Veterans Affairs (VA) 
pharmacy program.
    The development of prescription medications that relieve suffering, 
prevent, cure, and help manage illnesses has revolutionized modern 
medicine and is improving the quality of life for many of our ill, 
injured and elderly veterans.
    Last year, VA filled over 125 million prescriptions for veteran 
patients and expects that amount to double in 2010 to more than 254 
million prescriptions.
    In 1997, with the increased use of pharmaceuticals and concerns 
over rising drug costs and geographic variability, VA was prompted to 
establish a single National Formulary to help manage costs and improve 
consistency across the VA healthcare system. The National Formulary 
provides VA with leverage to purchase in bulk and increase the cost-
effectiveness of VA's pharmacy program.
    A formulary system has the potential to also help educate 
physicians and patients about drugs, ensure the use of quality drug 
products and promote evidence-based management of disease.
    However, it can also generate serious concerns about quality of 
care because formularies restrict the different classes of drugs 
available. For instance, a drug on the list may not be effective for 
100 percent of the patients or it could be unexpectedly discontinued. 
Additionally there is a lengthy process for the inclusion of a new or 
breakthrough drug, and there are questions about the fairness and 
responsiveness for the approval of the use of a non-formulary drug to 
meet the specific needs of a veteran patient.
    VA's proper management of the formulary system is vital to ensuring 
our veterans receive the highest quality of care and access to the most 
up-to-date medications they deserve.
    Today's hearing will explore these important issues, and I would 
like to thank all of our witnesses today for their testimony and I look 
forward to the hearing.
    Thank you Mr. Chairman. I yield back the balance of my time.
                   MATERIAL SUBMITTED FOR THE RECORD

                       U.S. Department of Health and Human Services
                                       Food and Drug Administration
                                                      Rockville MD.
                                                   November 6, 2009

Hon. Michael H. Michaud
Chairman
Subcommittee on Health
Committee on Veterans' Affairs
House of Representatives
Washington, D.C. 20515

Dear Mr. Chairman:

    This letter is in follow-up to the September 22, 2009, hearing 
entitled ``Is the U.S. Department of Veterans Affairs (VA) Meeting the 
Pharmaceutical Needs of Veterans? An Examination of the VA National 
Formulary Issues of Patient Safety, and Management of the Pharmacy 
Benefits Program.'' During that hearing you asked how the Food and Drug 
Administration (FDA or the Agency) deals with complaints about conflict 
of interest. After receiving further clarification from your staff, 
below is our response your question, as it specifically pertains to 
potential conflicts of interest and FDA advisory committee panels.
    FDA's advisory committees provide independent expert advice to the 
Agency on scientific, technical, and policy matter related to the 
development and evaluation of FDA-regulated products. Advisory 
committees enhance FDA's ability to protect and promote public health 
by ensuring it has access to advice, in a public manner, as permitted 
by existing laws and regulations. Although advisory committees provide 
recommendations to FDA, FDA makes the final decisions.
    FDA's advisory committee program is governed by a number of Federal 
laws and regulations that set forth standards for convening advisory 
committees and reviewing potential conflicts of interest, among other 
things. FDA also has developed guidance documents that describe the 
Agency's recommendations and policy related to our advisory committees.
    FDA is committed to strictly adhering to the laws and regulations 
governing the process for selecting advisory committee members. In 
August 2008, FDA implemented several improved policies and procedures 
to strengthen its management of advisory committees. These policies and 
procedures are detailed in the form of guidance documents and their 
goal is to make the process of seeking advice from independent experts 
as open, public and transparent as possible.
    One guidance, Procedures for Determining Conflict of Interest and 
Eligibility for Participation in FDA Advisory Committees, describes how 
FDA determines whether an individual invited to participate in an FDA 
advisory committee has a potential conflict of interest and whether he/
she is eligible to participate in an advisory meeting. The approach set 
forth in this guidance makes the Agency's review of potential conflicts 
of interest more stringent than current legal requirements and previous 
FDA guidance. For example, according to the new guidance:

      If an individual, their spouse, or minor child has 
potentially conflicting financial interests totaling more than $50,000, 
they would not ordinarily be allowed to participate in that meeting.
      Four specific scenarios are outlined where the conflict 
is significant and FDA does not intend to issue a waiver, even if the 
potential personal conflict is below $50,000.
      Before a waiver is issued, FDA will require a showing 
that the waiver is necessary to afford the committee essential 
expertise.
      FDA will limit the number of waivers that are granted, as 
is now required by law.

    Another guidance, Public Availability of Advisory Committee 
Members' Financial Interest Information and Waivers, focuses on 
ensuring that when FDA grants a waiver, the circumstances of that 
waiver are made clear and transparent to the public. Therefore, all 
waivers and advisors' disclosures of potentially conflicting interests 
are posted to the FDA Web site. In most cases, FDA posts these 
documents at least 15 days prior to the relevant advisory committee 
meeting. These changes help to make the basis for FDA's decision to 
grant a waiver clearer to the public.
    A fact sheet providing a detailed summary of each guidance is 
enclosed and can also be found on FDA's Web site at http://www.fda.gov/
ociadvisory/factsheet 080408.html. These guidances enable FDA to 
improve consistency in the handling of potential conflicts of interest 
and to provide greater clarity to the public. FDA makes the laws, 
regulations, and guidance documents pertaining to advisory committees 
available through our Web site at www.fda.gov/advisorycommittees to 
provide ready access to the statutory aid regulatory framework that FDA 
advisory committees operate within, and to describe the steps that FDA 
has taken to enhance decision-making, increase transparency, and 
strengthen public confidence in our advisory committee program.
    Thank you for your interest in this matter. If you have further 
concerns, please let us know.

            Sincerely,

                                                     Jeanne Ireland
                             Assistant Commissioner for Legislation
    Enclosure:
    Fact Sheet: ``Improved Policies and Procedures Regarding 
Transparency, Public Disclosure for FDA Advisory Committees''

                               0_________

                   U.S. Food and Drug Administration
              U.S. Department of Health and Human Services
                               Fact Sheet
        Improved Policies and Procedures Regarding Transparency,
             Public Disclosure for FDA Advisory Committees
    The Food and Drug Administration today announced several improved 
policies and procedures to strengthen its management of FDA advisory 
committees. They are detailed in four final guidance documents and one 
draft guidance outlined below. Our goal is to make the our process for 
seeking advice from independent experts as open, public, and 
transparent as possible, so that we maintain the highest public 
confidence in that process.
Final Guidance on Procedures For Determining Conflict of Interest and 
        Eligibility for Participation in FDA Advisory Committees
    This guidance describes how FDA will determine whether an 
individual invited to participate in an FDA advisory committee has a 
potential conflict of interest and, accordingly, whether he or she is 
eligible to participate in an advisory committee meeting. FDA has for 
many years screened prospective advisory committee participants to 
determine whether the potential for a financial conflict of interest 
exists. When an advisor has a potential conflict, FDA may grant a 
waiver to allow participation.
    The approach set forth in FDA's guidance makes the agency's review 
of potential conflicts more stringent than the legal requirements 
recently put in place by Congress. It is more stringent than FDA's 
Waiver Criteria 2000 guidance in four ways:

      First, if an individual, his spouse, or minor child has 
potentially conflicting financial interests totaling more than $50,000, 
he or she would not be allowed to participate in that meeting.
      Second, the guidance specifies four scenarios where the 
conflict is significant and FDA does not intend to issue a waiver, even 
if the potential personal conflict is below $50,000. (For example, if 
the advisor is the principal investigator of a clinical trial of a 
product about which the committee will be providing advice, the advisor 
will not be allowed to participate in that meeting.)
      Third, before we issue any waiver, we will require a 
showing that the waiver is necessary to afford the committee essential 
expertise.
      Fourth, as now required by law, we will limit the number 
of waivers we grant.

    The guidance will improve consistency in the agency's handling of 
potential conflicts of interest and provide greater clarity to the 
public.
Final Guidance on Public Availability of Advisory Committee Members' 
        Financial Interest Information and Waivers
    This guidance will ensure that when FDA grants a waiver, the 
circumstances of that waiver will be made clear and transparent to the 
public. All waivers and advisors' disclosures of potentially 
conflicting interests will be posted to the FDA Web site. In most 
cases, FDA will post these documents at least 15 days prior to the 
relevant advisory committee meeting. New templates for waivers and 
financial interest disclosure will make them clearer and more 
consistent. These changes will make the basis for FDA's decision to 
grant a waiver clearer to the public.
Final Guidance on Voting Procedures at Advisory Committee Meetings
    This guidance is intended to ensure integrity of the voting process 
at advisory committee meetings. It recommends that any question put to 
a vote be clearly and collectively understood by those voting, and it 
urges that there be a robust discussion of the issues at the heart of 
the question before voting takes place. The guidance also recommends 
that votes be cast simultaneously rather than sequentially. This is 
intended to avoid ``voting momentum,'' in which voters may be 
influenced, even subconsciously, by the votes of those who precede 
them.
Final Guidance on Preparation and Public Availability of Information 
        Given to Advisory Committee Members
    This guidance is intended to help sponsors develop, prepare and 
submit to FDA briefing materials that will be given to advisory 
committee members as background information before an open FDA advisory 
committee meeting. It sets out timelines for preparing and submitting 
the briefing materials to FDA. The guidance also describes when FDA 
intends to make the briefing materials available to the public.
    As described in the guidance, FDA intends to notify a sponsor about 
an open meeting that will involve its product approximately 55 business 
days before the meeting. The guidance then includes information on how 
to prepare its briefing materials, and sets out timelines for the 
submission, review, and public availability of the briefing materials. 
The timelines vary depending on whether the sponsor's briefing 
materials may include information that, under certain circumstances, 
could be considered to be exempt from public disclosure, or whether the 
sponsor is stating that its briefing materials are fully releasable to 
the public.
    The guidance states that FDA intends to post the publicly available 
version of the briefing materials on its Web site no later than two 
full business days before the day the meeting is scheduled to occur.
Draft Guidance on When FDA Convenes an Advisory Committee
    This draft guidance proposes to clarify when FDA should refer a 
matter to an advisory committee. It is being issued for consideration 
and public comment.
    In some instances, FDA is required by law to refer an issue to an 
advisory committee. In others, it has discretion to consider whether to 
refer a matter to an advisory committee. The guidance proposes that FDA 
consider three factors when deciding whether to voluntarily refer a 
matter to an advisory committee. It proposes that when one of these 
factors is met, FDA should refer the matter to an advisory committee. 
Conversely, if none of the factors is met, FDA should not refer the 
matter.
    The guidance also proposes that, for all first-of-a-kind or first-
in-class products for human use, FDA either refer the product to an 
advisory committee or provide in the action letter for that product a 
summary of the reasons why it did not refer the product to an advisory 
committee before approval.
Web Site Improvements
    FDA has enhanced the transparency of its advisory committee program 
by overhauling its advisory committee Web site. We began by engaging 
various stakeholder groups--including consumers, patients, healthcare 
professionals, and industry representatives--to help us assess the Web 
site's strengths and weaknesses.
    Based on this assessment, we redesigned the Web site and 
streamlined access to the information that appears to be of greatest 
interest to users. We then performed usability testing to evaluate the 
changes and to further refine our improvements.
    The most significant improvements include the following:

      Meeting announcements will be posted in an easy to read 
format that provides prominent information on the page and allows for 
quick access to other meeting information in an organized fashion.
      Past meeting information, which was difficult to find on 
the original site, is easily accessible from the main page.
      Meeting materials are now posted in one location, 
removing the previously difficult process of finding, or not finding, 
information via a multitude of ill-defined links.
      Each committee will have one location that provides full 
information on that committee--its Charter, Roster, steps for 
nominating candidates for committee vacancies, past meeting 
information, and who to contact with questions about the committee.
      A new section titled ``Most Popular'' links will 
highlight significant areas of public interest.
       The page offers an opportunity for consumers to provide 
feedback on the site our advisory Committees--and we'll post summaries 
of that feedback.

    http://www.fda.gov/oc/advisory/factsheet080408.html

                                 

                                     Committee on Veterans' Affairs
                                             Subcommittee on Health
                                                    Washington, DC.
                                                    October 1, 2009

Honorable George J. Opfer
Inspector General
Office of Inspector General
U.S Department of Veterans Affairs
801 I Street, NW
Washington, DC 20001

Dear Inspector General Opfer:

    Thank you for the testimony of Belinda J. Finn, Assistant Inspector 
General for Audits and Investigations at the U.S. House of 
Representatives Committee on Veterans' Affairs, Subcommittee on Health 
Oversight Hearing on ``Is the VA Meeting the Pharmaceutical Needs of 
Veterans? An Examination of the VA National Formulary, Issues of 
Patient Safety, and Management of the Pharmacy Benefits Program.'' that 
took place on September 22, 2009.
    Please provide answers to the following questions by November 12, 
2009, to Jeff Burdette, Legislative Assistant to the Subcommittee on 
Health.

     1.  Do you believe that the VA has derived sufficient benefit from 
the centralizing of contracting responsibilities at the National CMOP 
office? In other words, does the national CMOP remain the preferred 
model for acquiring pharmaceutical supplies and services?
     2.  In addition to the VA issuing and enforcing policies to 
improve accountability of non-controlled drugs, what additional tools 
does the VA need for effective enforcement of the new policies? For 
example, Ms. Finn's testimony noted the need to improve IT. Are there 
other tools that the VA needs to acquire?

    Thank you again for taking the time to answer these questions. The 
Committee looks forward to receiving your answers by November 12, 2009.

            Sincerely,

                                                 MICHAEL H. MICHAUD
                                                           Chairman

                               0_________

                                U.S. Department of Veterans Affairs
                                        Office of Inspector General
                                                    Washington, DC.
                                                  November 12, 2009

Hon. Michael H. Michaud
Chairman
Subcommittee on Health
Committee on Veterans' Affairs
United States House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

    This is in response to your October 1, 2009, letter following the 
September 22, 2009, hearing on Is the VA Meeting the Pharmaceutical 
Needs of Veterans? An Examination of the VA National Formulary, Issues 
of Patient Safety, and Management of the Pharmacy Benefits Program. 
Enclosed is our response to the additional hearing questions. This 
information has also been provided to Congressman Henry E. Brown, Jr., 
Ranking Republican Member, Subcommittee on Health.
    Thank you for your interest in the Department of Veterans Affairs.

            Sincerely,

                                                    GEORGE J. OPFER
                                                  Inspector General
    Enclosure
    [An identical letter was sent to Hon. Henry E. Brown, Jr., Ranking 
Republican Member, Subcommittee on Health, Committee on Veterans' 
Affairs.]

                               0_________

    Questions for the Honorable George J. Opfer, Inspector General,
U.S. Department of Veterans Affairs, Before the Subcommittee on Health,
 Committee on Veterans' Affairs, United States House of Representatives
   Hearing on Is the VA Meeting the Pharmaceutical Needs of Veterans?
    Question 1: Do you believe that the VA has derived sufficient 
benefit from the centralizing of contracting responsibilities at the 
National CMOP Office? In other words, does the national CMOP remain the 
preferred model for acquiring pharmaceutical supplies and services?
    Response: The VA's National Acquisition Center (NAC) is responsible 
for purchasing pharmaceuticals, supplies, and services dispensed by the 
national community mail outpatient pharmacies (CMOPs). Centralizing 
this function provides VA the following benefits:

      Opportunities to leverage buying power to obtain lower 
prices and volume discounts.
      Decrease in the potential for conflict of interest 
situations by having independent contracting actions.
      Creation of a professional acquisition staff dedicated to 
supporting pharmaceutical contract initiatives.
      Improvement in the compliance with the Federal 
Acquisition Regulation and VA Acquisition Regulation.

    The CMOP is a preferred model for dispensing pharmaceutical 
supplies and services because automation allows for safety in the 
dispensing of pharmaceuticals and it is less expensive due to better 
drug pricing and greater efficiencies realized by relying on seven 
CMOPs as opposed to individual VA medical centers and clinics.
    Question 2: In addition to the VA issuing and enforcing policies to 
improve accountability of non-controlled drugs, what additional tools 
does the VA need for effective enforcement of the new policies? For 
example, Ms. Finn's testimony noted the need to improve IT. Are there 
other tools that the VA needs to acquire?
    Response: In our report, Audit of the Veterans Health 
Administration's Management of Non-Controlled Drugs (June 23, 2009), we 
identified several weaknesses in the Veterans Health Information System 
and Technology Architecture (VistA)--the information system the 
Veterans Health Administration (VHA) uses to manage pharmacy services 
at its medical facilities. The current VistA system cannot provide 
information to accurately account for a facility's on-hand drug 
inventory.
    In 2003, VHA launched the Pharmacy Re-Engineering (PRE) project to 
make improvements to VistA. We did not evaluate the design of the 
project or results of system tests, but Pharmacy Benefits Management 
officials told us that this new system is expected to address VistA 
deficiencies. The PRE project was halted as part of VA's Office of 
Information and Technology's review of VA system development projects, 
and has not yet fully restarted. Other IT systems or tools that would 
improve accountability over inventories include centralization of 
billing and drug file management, and Radio Frequency Identification 
(RFID) labeling for pharmaceuticals.
    During our recent audits, the Pharmacy Benefits Management Services 
indicated that they would like to see the creation of specialty CMOPs. 
Currently, each CMOP manages many low volume products. By centralizing 
the low volume products, a specialty CMOP can bring the volume of those 
products up to a higher level and eliminate the distribution of those 
products at other CMOPs; potentially enabling CMOPs to manage inventory 
better. To recognize these improvements, CMOPs also need more robust 
software for billing customers. A system is needed where the CMOP that 
fills and bills for the prescription is transparent to the medical 
center.
    For drug file management, there is currently little standardization 
of stock across the system. Improvements could be realized by 
standardizing stock lists and prices. Currently, CMOPs attempt to 
maintain prices on several thousand line items of inventory and 
predictably inventory information is not accurate at given points in 
time. Managing the CMOP stock list centrally would enable CMOPs to 
vastly improve their drug file management and allow them to follow the 
private industry model where prices are pushed out to each CMOP from a 
central location.
    The use of a RFID chip inside labels would enable CMOPs to 
electronically track stock from the time it came into their facilities 
until the time it left. If CMOP suppliers and United States Postal 
Service used this same technology, CMOPs could track drugs through the 
entire supply chain right up to the point where they reach the patient. 
Currently, costs appear prohibitive, but RFID pricing technology seems 
to be decreasing rapidly and VA should leverage future inventory 
management tools that enable the tracking and accountability for drugs 
through the entire supply chain.

                                 

                                     Committee on Veterans' Affairs
                                             Subcommittee on Health
                                                    Washington, DC.
                                                    October 1, 2009

Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20240

Dear Secretary Shinseki:

    Thank you for the testimony of Michael Valentino, Chief Consultant 
to the Pharmacy Benefits Management Service at the U.S. House of 
Representatives Committee on Veterans' Affairs, Subcommittee on Health 
Oversight Hearing on ``Is the VA Meeting the Pharmaceutical Needs of 
Veterans? An Examination of the VA National Formulary, Issues of 
Patient Safety, and Management of the Pharmacy Benefits Program.'' that 
took place on September 22, 2009.
    Please provide answers to the following questions by November 12, 
2009, to Jeff Burdette, Legislative Assistant to the Subcommittee on 
Health.

     1.  How are new drugs added to the VA national formulary? How are 
requests from VISNs and local facilities to add new drugs to the 
formulary handled? How often is the national formulary updated and when 
was the last update?
     2.  It is our understanding that each VA facility must institute a 
process to review requests for drugs that are not on the formulary. 
What are the respective roles of the VA medical center, VISN, and the 
VA central office in ensuring that the review process for non-formulary 
drug requests are not subjective and based on objective criteria?
     3.  What percent of non-formulary drug requests are approved? If 
such requests for non-formulary drugs are not approved, what are some 
typical reasons for the non-approval? Does the VA track and store data 
on non-formulary drug requests?
     4.  In 2000, a report by the Institute of Medicine found that the 
VA's national formulary lacked ``essential systems to assure that new 
drugs are expeditiously reviewed.'' Please discuss the steps that the 
VA has taken to address this deficiency.
     5.  How does the VA handle issues of patient safety and prevent 
adverse drug interactions for veterans who fill their prescriptions 
through the VA and private pharmacies?
     6.  What is the VA doing to encourage medication compliance among 
veterans to maximize the results of the drug therapy?
     7.  The VA's November 2002 directive on ``VA National Dual Care 
Policy'' expired in July 2007. Have there been any updates to the 
directive? If not, are there plans to issue an updated directive?
     8.  Since the VA developed an integrated Web-based application 
that fully automates the VA's adverse drug event reporting process, has 
the reporting increased? If so, by how much? What does the VA do with 
this data? Who reviews the reports and what action, if any, is taken? 
For example, are there a certain number of adverse drug events that are 
reported before the VA releases guidance?
     9.  Please describe the work and role of the VA Center for 
Medication Safety. For example, what are some examples of the 
medication safety projects that this Center implements? How does the 
Center educate the field on safe and best practices to minimize adverse 
drug events? What are some examples of the research that the Center has 
translated into national policy?
    10.  Please describe the VA's interactions with FDA on drug 
recalls. Does the VA follow the FDA's lead? Or, does the VA have the 
authority to halt the use of the prescription drugs by the veterans 
before FDA officially initiates the recall?
    11.  As you know, off-labeling is use of drugs outside of the 
approved indications by FDA. How prevalent are off-label prescriptions 
at the VA? And how does the VA deal with off-label drug use in cases 
where there is little or not supportive evidence of benefit or safety 
in a population or for a medical condition?
    12.  It is our understanding that some VA facility directors confer 
prescribing authority to certain nurses, pharmacists, and physician 
assistants if the state provides this authority and if it is cosigned 
by a medical doctor. What guidance and oversight is provided by the 
central VA office?
    13.  Based on the findings of the Inspector General's June 2009 
audit reports, what steps has the VA taken to address issues identified 
with the management of non-controlled drugs and the CMOP contract?
    14.  Why did the VA allow the directive on Drug Accountability 
Software to lapse in 2003? Are there plans for an updated directive?

    Thank you again for taking the time to answer these questions. The 
Committee looks forward to receiving your answers by November 12, 2009.

            Sincerely,

                                                 MICHAEL H. MICHAUD
                                                           Chairman

                               0_________

                        Questions for the Record
               The Honorable Michael H. Michaud, Chairman
       House Committee Veterans' Affairs, Subcommittee on Health
        Is the U.S. Department of Veterans' Affairs (VA) Meeting
        the Pharmaceutical Needs of Veterans? An Examination of
        the VA National Formulary, Issues of Patient Safety, and
              Management of the Pharmacy Benefits Program
                           September 22, 2009
    Question 1: How are new drugs added to the VA national formulary? 
How are requests from VISNs and local facilities to add new drugs to 
the formulary handled? How often is the national formulary updated and 
when was the last update?
    Response: The Department of Veterans' Affairs (VA) policy (http://
vaww1.va.gov/vhapublications/ViewPublication.asp?pub_ID=1834) requires 
that drugs newly approved by the Food and Drug Administration (FDA) be 
automatically reviewed for VA National Formulary (VANF) as soon as 
sufficient safety and efficacy information becomes available. In 
addition, requests for changes in a VANF drug status may be submitted 
to the pharmacy benefits manager (PBM) by a Veterans Integrated Service 
Network (VISN) formulary committee, the VISN pharmacist executive 
committee (VPE), the Medical Advisory Panel (MAP), a Veterans Health 
Administration (VHA) Chief Medical Consultant, or a VHA Chief Medical 
Officer. An individual or group of physicians may submit a request for 
VANF addition through its VISN Formulary Committee(s). Decisions for 
VANF listing are evidence-based and made by consensus of the MAP and 
VPE Committees. The VANF is updated monthly, provided that there are 
changes to be posted. The last two formulary updates occurred on July 
1, 2009, and October 7, 2009.
    Question 2: It is our understanding that each VA facility must 
institute a process to review requests for drugs that are not on the 
formulary. What are the respective roles of the VA medical center, 
VISN, and the VA central office in ensuring that the review process for 
non-formulary drug requests are not subjective and based on objective 
criteria?
    Response: VA policy requires that a non-formulary request process 
exist at each VA medical center (http://vaww1.va.gov/vhapublications/
ViewPublication.asp?pub_ ID=1834).
    This policy is intended to assure that decisions are evidence-based 
and timely. Routine requests for non-formulary agents are reviewed and 
the requestor is notified of the decision within 96 hours of receipt of 
a completed non-formulary request. Emergency requests for non-formulary 
agents are immediately addressed by individual(s) identified in local 
VA medical center policy. If the degree of urgency or emergency is in 
question, the drug is provided immediately and the nature of the 
urgency or emergency is reviewed afterward.
    Non-formulary drugs that have received FDA approval are only to be 
approved when:

     1.  A documented contraindication exists to the formulary agent(s)
     2.  A documented adverse reaction occurred to the formulary 
agent(s)
     3.  A documented therapeutic failure to formulary therapeutic 
alternatives exists
     4.  No formulary alternative exists
     5.  The patient has previously responded to a non-formulary agent 
and serious risk is associated with a change to a formulary agent; or
     6.  Other circumstances having compelling evidence-based clinical 
reasons

    All physician-initiated appeals of a non-formulary drug request are 
received and adjudicated by the facility chief of staff.
    Medical center management, VISN pharmacist executives (VPE) and VA 
Central Office Pharmacy Benefits Management (PBM) Service staff have 
the responsibility to assure the intent of the VA policy is followed. 
Quarterly reports from VPEs are sent to the PBM Service. These reports 
show the number of non-formulary requests received, approved and 
denied, and the average processing time. Evidence-based prescribing 
guidance documents, when applicable, are the objective criteria used to 
assist clinicians in the non-formulary review process.
    Question 3: What percent of non-formulary drug requests are 
approved? If such requests for non-formulary drugs are not approved, 
what are some typical reasons for the non-approval? Does the VA track 
and store data on non-formulary drug requests?
    Response: Approximately 81 percent of non-formulary drug requests 
are approved. PBM does not track reasons for the non-approval of 
requests, however, a typical reason is due to clinicians not being 
aware of a suitable formulary alternative, particularly in the 
situation of medical trainees. Other common reasons include requests 
for off-label indications where there is no evidence to support safety 
and efficacy for the intended indication, and indications falling 
outside of VHA's evidence-based clinical criteria for use. Clinicians 
are able to ask for adjudication of any denial, if they disagree with 
the initial non-approval of the drug. PBM does track and store data 
regarding the number of non-formulary drug requests received, approved 
and denied, and the average process time for adjudicating the requests.
    Question 4: In 2000, a report by the Institute of Medicine found 
that the VA's national formulary lacked ``essential systems to assure 
that new drugs are expeditiously reviewed.'' Please discuss the steps 
that the VA has taken to address this deficiency.
    Response: At the time the Institute of Medicine (IOM) conducted its 
review of the VA National Formulary, the addition of new drugs to the 
VANF was governed by VHA Directive 97-047 ``VA National Formulary 
Policy.'' Paragraph 2.d. of this policy stated, ``PBM Formulary 
recommendations will be based on a review of new drug products approved 
by the Food and Drug Administration (FDA) and recommendations by VISN 
formulary committees. For a new drug product to be considered for 
addition to the Formulary, it must be on the market for a minimum of 1 
year. Exceptions can be made if the FDA designates the product as a 
unique therapeutic entity (FDA designation of `1P').'' This policy was 
instituted as a safety precaution because many new drugs were being 
fast tracked through the review process and adequate clinical trials, 
in our patient population, were not always available. This 1 year 
period allowed for adequate evaluation of these agents in our patient 
population.
    Directive 97-047 did not preclude VHA from reviewing new drugs 
expeditiously; it only prevented VHA from adding them to the VA 
National Formulary for 1-year after they reached the market unless they 
were approved by the FDA with a 1P designation. It is important to note 
that individual VISNs and facilities were not held to this policy for 
drug formularies managed at the local and VISN levels. They could, and 
did, add new drugs to VISN and facility formularies before the 1-year 
waiting period. It is also important to note that not all newly 
approved drugs are relevant to the VA population and would not be 
expected to be reviewed nor added to the formulary. Drugs used 
exclusively in the pediatric population are one example where the drugs 
would be neither extensively reviewed nor added to the formulary.
    VHA advised IOM staff at the time they began their analysis that 
based on PBM's own review of existing formulary policy, it had decided 
to change the 1-year moratorium and eliminate that requirement from PBM 
policy. Although one of the hearing panelists stated that VA's 1-year 
moratorium policy is still in effect, that is not the case; it was 
eliminated in July 2001.
    From 2001 through 2009 all policy governing VA Formulary practice 
was contained in VA Manuals, VHA Directives and PBM Policies; modified 
to accommodate changes. The National Formulary was a ``core formulary'' 
to which each VISN was permitted to supplement with local additions.
    In an effort to ensure that a travelling veteran could obtain a 
needed refill or renewal of a scheduled medication at any VA location, 
the VISN Pharmacist Executives and the Medical Advisory Panel decided 
to do away with VISN variation and establish a comprehensive National 
Formulary; to which additions at the local level are no longer 
permitted. Therefore, on February 26, 2009, VHA published a Handbook 
(VHA Handbook 1108.08, ``VHA Formulary Management Process'') which 
provided a comprehensive document encompassing all prior policy; 
including changes implemented subsequent to the IOM analysis. Note: 
Under each formulary process the ability of the provider to request a 
medication via a Non-formulary Request (with an approval rate of 80 
percent) was available. This accounts for approximately 4 percent of 
total prescriptions dispensed by VHA.
    Question 5: How does the VA handle issues of patient safety and 
prevent adverse drug interactions for veterans who fill their 
prescriptions through the VA and private pharmacies?
    Response: VHA's current drug-drug interaction (DDI) software 
package is available at the point of care to warn against potential 
critical and significant drug-drug interactions when a provider enters 
an outpatient prescription to be filled in a VA pharmacy. Potential 
interactions are communicated to prescribers as an Alert. Prescriptions 
obtained outside VA are recorded in the ``non-VA medication'' field in 
the computerized patient record system (CPRS) as part of the medication 
reconciliation process or when at the patient's request, a VA 
prescriber writes a prescription for the patient to fill at his or her 
expense at a non-VA pharmacy. The CPRS can provide order checks for 
medications dispensed by a VA pharmacy, or those documented as 
dispensed from a non-VA pharmacy when the drug is matched to VA's 
national drug file. Prescribers are required to state an ``override 
reason'' when submitting an order containing a critical drug-drug 
interaction for which they receive an Alert. Drug-drug interactions for 
non-VA medications are subject to additional manual screening by a 
pharmacist during the final order review. Any potential interactions 
identified during the final manual review are communicated to the 
prescriber.
    Question 6: What is the VA doing to encourage medication compliance 
among veterans to maximize the results of the drug therapy?
    Response: Medication compliance and monitoring is performed by 
clinical pharmacists, nurses and providers and discussed with patients 
during outpatient visits. These reviews evaluate the dose and schedule 
of each medication the patient is currently taking and are performed by 
clinicians throughout VA. Compliance is assessed by asking the patient 
about their medications through a series of questions and evaluating 
prescription refill patterns. It is always important to ask patients if 
they are having difficulty remembering to take their medications and VA 
believes clinical pharmacists are integral to the healthcare team to 
identify these types of barriers to compliance. For some patients, 
there may be an opportunity to reduce the medication burden (i.e. 
polypharmacy) to increase compliance. For others with a significant 
number of prescriptions, compliance may be increased through the use of 
assistive devices such as pill boxes, personalized medication schedules 
etc., which VA can provide.
    CPRS version 26, released in May 2006, introduced new graphing 
features that are available to providers. Medication compliance can be 
charted in a graph with indications of prescription dispensing events, 
prescription days supply, and any relevant corresponding laboratory 
results for the patient. This allows a visual representation of when a 
patient can be reliably expected to have or have had a supply of 
medication on-hand.
    Overall, medication compliance and monitoring is assessed and 
monitored on an ongoing case-by-case basis via numerous mechanisms 
(patient interviews, chart reviews and refill record reviews). 
Medication education and adherence is a shared responsibility among 
patients and their healthcare providers. Clinical pharmacists are 
extensively trained to assist patients with medication adherence and 
are available throughout VA's facilities to provide this service.
    Question 7: The VA's November 2002 directive on ``VA National Dual 
Care Policy'' expired in July 2007. Have there been any updates to the 
directive? If not, are there plans to issue an updated directive?
    Response: VA reissued the directive entitled, ``VHA National Dual 
Care Policy'' on August 25, 2009 (http://vaww1.va.gov/vhapublications/
ViewPublication.asp?pub_ ID=2058).
    Question 8: Since the VA developed an integrated Web-based 
application that fully automates the VA's adverse drug event reporting 
process, has the reporting increased? If so, by how much? What does the 
VA do with this data? Who reviews the reports and what action, if any, 
is taken? For example, are there a certain number of adverse drug 
events that are reported before the VA releases guidance?
    Response: VHA implemented its Web-based Veterans adverse drug event 
reporting system (VA ADERS) in March 2007. The legacy adverse drug 
event (ADE) system was used for reporting all serious ADEs prior to the 
implementation of VA ADERS. The increased reporting provides a more 
comprehensive assessment of adverse effects within the ``veteran 
population.'' This in turn allows for increased vigilance and a more 
rapid response when concerns about therapy in this specific population 
are evidenced.
    Due to the labor intensive process involved in coding ADE reports 
in the legacy system, only serious ADEs were required to be reported. 
The Web-based system automates coding of ADEs which allows for both 
non-serious and serious ADEs to be reported. The total number of ADEs 
reported in the legacy ADE database, which was in place from Fiscal 
Year 2001-2006, was 21,357. Since the implementation of VA ADERS in the 
3rd quarter of FY 07 to the present, there have been 115,398 ADEs 
reported. This is 5 times more ADE reports in approximately half the 
time. The number increases to 9 times more ADE reports if an equal 
timeframe is used (FY 2004-2006: 12,855 reports) for a more direct 
comparison of ADE reports in VA ADERS to the number of ADE reports in 
the legacy ADE system. It is evident that the number of reported ADEs 
increased significantly as a result of the Web-based ADE system. This 
does not imply that more ADEs are occurring; it is only proof that the 
number of reports has increased, presumably due to ease of entry and 
staff education.
    The data reported in VA ADERS is used for benchmarking reportable 
ADEs, assessing preventable ADEs, delineating between ADEs caused by 
the inherent pharmacology of a drug, drug-drug interactions, or 
idiosyncratic mechanisms. Standard reports such as the top 10 ADEs, top 
10 drugs related to ADEs, the number of ADEs reported for new drugs, 
and ADEs reported to the FDA's MedWATCH program are tracked daily and 
reported nationally on a quarterly basis. In addition to the standard 
reports conducted by the VA ADERS team, ad hoc evaluations and reports 
are conducted as requested and placed on a predetermined reporting 
schedule (i.e. influenza ADEs are identified and reported weekly). The 
ad-hoc ADE reports are often conducted in response to a Risk 
Communication released by the FDA, a therapeutic or generic conversion 
taking place across the system, a cluster of ADEs reported in a given 
facility or VISN, an unexpected ADE report from a given site or in 
response to national safety campaign (i.e. influenza and antiviral 
use).
    The reports are reviewed at the facility, VISN, and national 
levels. The national standard reports are reviewed by the VA ADERS 
team, the VA ADERS Advisory Committee and the Directors of VAMedSAFE. 
This information is assessed by the VA ADERS team and other staff from 
VAMedSAFE on a quarterly basis, or more frequently if needed. The VISN 
and facility reports are reviewed and assessed monthly by the facility 
Pharmacy & Therapeutics Committee (P&T) and the VISN Formulary 
Committees. The actions taken are in direct association with the 
problem identified. Examples include:

      Facility example: In response to an ADE resulting in an 
interaction between an anticoagulation drug that requires frequent 
therapeutic monitoring and another drug, the facility instituted a 
process to notify anticoagulation providers when patients are 
prescribed critically interacting drugs by another provider.
      VISN example: Dermatology staff identified that ADEs were 
occurring when topical steroid products were applied liberally. The 
term ``liberally'' was removed from the ordering process and replaced 
with ``sparingly'' and ``lightly''. By removing liberally as an option, 
providers can no longer inadvertently order the inappropriate 
directions that were contributing to the ADEs.
      National example: A review of a few serious ADEs related 
to intravenous iron dextran products led to the removal of one of the 
iron dextran formulations from the National VA Formulary.

    The three examples above illustrate how actions taken in response 
to ADE reports occur at the facility, VISN, and national levels. The VA 
ADERS system is a dynamic system used for benchmarking, surveillance 
and process system improvements, all of which require different types 
and degrees of actions depending on the level and seriousness of the 
event. There is no ``threshold'' or ``preset ADE number'' that dictates 
a guidance release; however, medication safety is inherent in the VA 
pharmacy culture and results and reports from this system are used on a 
regular basis to aid in process improvements that enhance patient 
safety at the facility or VISN level, add to information at a national 
level to assist in Drug Safety Risk Communications and informed 
decisions, and lastly, serve as a foundation for developing national 
safety based Medication Use Evaluations (MUE).
    Question 9: Please describe the work and role of the VA Center for 
Medication Safety. For example, what are some examples of the 
medication safety projects that this Center implements? How does the 
Center educate the field on safe and best practices to minimize adverse 
drug events? What are some examples of the research that the Center has 
translated into national policy?
    Response: The VA Center for Medication Safety (VAMedSAFE) is a 
world-class comprehensive pharmacovigilance program. Pharmacovigilance 
is defined as the science of the detection, assessment, understanding 
and prevention of the adverse effects of drugs. VAMedSAFE has 
implemented many national projects to improve drug safety in the 
Veteran population. VAMedSAFE is recognized nationally for its efforts 
in drug safety and as a result has entered into a collaborative 
agreement with the FDA to evaluate the significance of known ADEs, and 
to identify and track new and emerging drug safety issues. As such, 
VAMedSAFE conducts drug safety and monitoring efforts with the rigor of 
a regulatory body, while maintaining the access and utilization 
required for a healthcare delivery system to take necessary action. The 
work of VAMedSAFE not only informs VA policy at the national level, but 
has been influential in many FDA decisions, hence affecting the U.S. 
population as a whole.
    VAMedSAFE accomplishes its goals by evaluating preventable ADEs 
through the use of active and passive surveillance techniques, 
providing interventions to decrease preventable ADEs through Risk 
Reduction programs, educating clinical staff about medication safety 
best practices, advising clinical staff about emerging safety issues 
through Medication Safety/Risk Communications, and conducting and 
promoting medication safety research. Examples of VAMedSAFE projects 
include:

      Rapid Cycle Evaluations--This method uses integrated 
clinical and administrative databases and mining of spontaneously 
reported ADEs (through VA ADERS) to identify and assess the rate and 
risk of ADEs for specific medications. Selected examples include:

        Flouroquinolones and dysglycemia
        Safety of non-steroidal anti-inflammatory drugs 
(NSAIDs) in VA System in regard to the risk of myocardial infarction
        Risk of thiazolidinediones and cardiovascular disease
        Long-acting opioids and all cause mortality (focus on 
methadone)

      Risk Reduction Projects--Risk Reduction is the method 
used by VAMedSAFE to identify and intervene on potential ADEs. Selected 
examples include:

        Nifedipine IR for hypertension
        High dose vitamin E for cardiovascular disease 
prophylaxis
        Glyburide use in elderly patients with renal 
insufficiency
        Use of high dose zolpidem IR

      National Medication Use Evaluations (MUEs)--VAMedSAFE 
conducts national MUEs to evaluate and monitor the safe and appropriate 
use of agents across the VA system. Selected examples include:

        Pravastatin vs Fluvastatin--Evaluation of safety and 
appropriate use following therapeutic interchange
        Travoprost--Evaluation of safety following a 
therapeutic interchange
        Erythropoesis--Stimulating Agents (ESAs)--Evaluation of 
appropriate monitoring to assure safe and cost-effective use of ESAs.

    To minimize adverse drug events, VAMedSAFE educates the field on 
safe and best practices through safety bulletins, safety information 
documents attached to risk reduction efforts and continuing education 
programs. In FY 2009, thirty Safety Bulletins were disseminated to the 
field. VAMedSAFE develops many bulletins elaborating on or clarifying 
early warning communications and other warnings from FDA; however, many 
safety bulletins are developed secondary to ADE signals identified 
through VAMedSAFE's surveillance efforts or through direct reports and 
concerns from the field. Selected examples include:

      Safety Bulletins

        Risk of Severe Hypoglycemia with Glyburide in Patients 
with Renal Insufficiency
        Iron Dextran and the ADEs associated with the high 
molecular weight formulation
        Concentrated opioid solutions and concentration/
confusion problems
        Oxybutynin and oxycodone Look-Alike Sound-Alike (LASA) 
errors

    VAMedSAFE promotes, conducts and assists other researchers with 
medication safety research projects designed to evaluate safety signals 
or confirm suspected ADE signals. These studies often give VA needed 
information to make informed formulary management decisions. Selected 
examples of VAMedSAFE research projects that have been translated into 
national policy or resulted in formulary management decisions include:

      Thiazolidinediones and risk of myocardial infarction--
This full study resulted from a Rapid Cycle Evaluation which was 
conducted in response to an FDA warning. The results of the study led 
to removal of a drug from the VANF and a revision of VA's prescribing 
criteria for this drug class.
      Fluoroquinolones and risk of dysglycemias--This study was 
conducted in response to a Rapid Cycle Evaluation that identified an 
ADE signal for severe dysglycemias with fluoroquinolones. The results 
of the study confirmed the suspected severe dysglycemia associated with 
some of the agents in the drug class. VA modified its prescribing 
criteria due to this study. Gatifloxacin utilization decreased 
substantially secondary to evaluations and recommendations in the 
prescribing criteria. VA's actions occurred 2 years prior to FDA 
recommending removal of the drug from the U.S. market.
      NSAIDs and the risk of myocardial infarction (MI)--This 
study resulted from a Rapid Cycle Evaluation that confirmed a 
cardiovascular ADE signal for the Cox-2 inhibitor drug class (a known 
ADE) and identified the absence of an ADE signal for some of the other 
NSAIDs. The results of the study further confirmed the risk of MI's 
with the Cox-2s and supported the safety of etodolac, the agent chosen 
as the recommended replacement for Cox-2s in VA.

    Question 10: Please describe the VA's interactions with FDA on drug 
recalls. Does the VA follow the FDA's lead? Or, does the VA have the 
authority to halt the use of the prescription drugs by the veterans 
before FDA officially initiates the recall?
    Response: The VA National Center for Patient Safety (NCPS) Product 
Recall Office (PRO) has organizational responsibility for all product 
recalls (including drug recalls) which involves identifying and 
removing recalled products from inventory. The PBM Services office has 
responsibility for reviewing all drug safety information including drug 
recalls, and developing Drug Safety Alerts when appropriate. PBM 
Services collaborates with NCPS PRO when drug recalls require 
contacting patients and replacing their supply of medication. NCPS PRO 
and PBM generally follow FDA's lead; however, PBM may determine that a 
drug recall should be considered ``patient level'' when the 
manufacturer and FDA have only recalled a drug to the ``retail'' level. 
VHA is not averse to initiating action ahead of or separate from FDA in 
order to provide enhanced drug safety for Veterans.
    VHA frequently has advance notice on planned announcements by FDA 
concerning drug safety. As part of the VA-FDA MOU, PBM is given the 
opportunity to review and comment on FDA announcements days in advance. 
In addition to providing input to FDA, VA has the opportunity for 
advance planning to respond to drug safety issues, including drug 
recalls. In FDA's testimony, they highlighted one example 
(propoxyphene) where a drug recall was being considered, and VA 
provided important clinical information that was used in their 
regulatory decision-making process. Another example where VA worked 
closely with FDA on a drug recall was with contaminated un-fractionated 
heparin.
    Question 11: As you know, off-labeling is the use of drugs outside 
of the approved indications by FDA. How prevalent are off-label 
prescriptions at the VA? And how does the VA deal with off-label drug 
use in cases where there is little or no supportive evidence of benefit 
or safety in a population or for a medical condition?
    Response: VA PBM has provided guidance for the off-label use of 
medications (http://www.pbm.va.gov/directive/
Guidance%20Off%20Label%20Prescribing.pdf). PBM uses evidence-based 
medicine to inform formulary and coverage decisions. Thus, if there is 
adequate evidence of sufficient quality for the safe and effective use 
of a medication for an off-label indication, VA may support use of that 
drug for that particular indication. It should be noted that other 
factors play a part in this decision, most important being the 
consideration of other therapeutic interventions or medications that 
are available to treat the same condition.
    When there is little or no evidence to support safety and efficacy 
for an off-label indication, decisions of coverage need to be decided 
on a case-by-case basis. In most circumstances, this requires 
consultation with the local Pharmacy and Therapeutics Committee, which 
can review the unique circumstances involved in the request. While 
there may be many situations where off-label use of medications is 
likely to benefit an individual patient, it should also be understood 
that there are many other examples where off-label use of medications 
has been associated with patient harm. VA's guidance document gives 
direction for making those difficult decisions.
    Question 12: It is our understanding that some VA facility 
directors confer prescribing authority to certain nurses, pharmacists, 
and physician assistants if the state provides this authority and if it 
is cosigned by a medical doctor. What guidance and oversight is 
provided by the central VA office?
    Response: Under the principle of Federal Supremacy, VHA grants the 
authority to prescribe non-controlled substances to Advanced Practice 
Nurses, Clinical Pharmacy Specialists, and Pharmacists with direct 
patient care responsibilities and Physician Assistants. VHA grants the 
authority to prescribe controlled substances only to those providers 
whose State licensure permits this practice. This may take the form of 
a clinical privilege statement or a Scope of Practice, as appropriate. 
Privileging or scope of practice for every individual is reviewed by 
the relevant facility service chief, whose recommendation is submitted 
to the appropriate facility-based body. For privileges, the 
recommendation, along with the appointment recommendation of the 
Professional Standards Board (PSB) or credentialing committee (if 
applicable), is submitted to the medical staff's Executive Committee 
for review. The medical staff's Executive Committee evaluates the 
applicant's credentials to determine if clinical competence is 
adequately demonstrated to support the granting of the requested 
privileges. A final recommendation is then submitted to the facility 
Director for approval. For scope of practice statements, the service 
chief's recommendation is submitted for final approval to the facility-
based authorizing body appropriate to each profession.
    VHA has issued Directives on each of the professional groups 
identified in the question that outline the approval process for 
prescriptive authority. These include VHA Directive 2009-014, 
Establishing Medication Prescribing Authority for Clinical Pharmacy 
Specialists; VHA Directive 2008-049, Establishing Medication 
Prescribing Authority for Advanced Practice Nurses; VHA Directive 2004-
029, Utilization Of Physician Assistants (PAs); and VHA Directive 2008-
043, Scope Of Practice For Pharmacists With Direct Patient Care 
(responsibilities).
    All practitioners are required to complete the standardized VHA 
credentialing. Advanced Practice Nurses and Clinical Pharmacy 
Specialists may be granted either clinical privileges or a Scope of 
Practice, as determined by their licensure and the facility. 
Pharmacists with direct patient care responsibilities and Physician 
Assistants are granted a Scope of Practice.
    Question 13: Based on the findings of the Inspector General's June 
2009 audit reports, what steps has the VA taken to address issues 
identified with the management of non-controlled drugs and the CMOP 
contract?
    Response: VHA has taken several steps to address the deficiencies 
identified in the Office of the Inspector General (OIG) reports. In 
regard to inventory management, VHA has developed a draft directive 
outlining the selective monitoring of high cost, high risk non-
controlled substances at VA medical centers and it is undergoing review 
and concurrence to become VHA policy. PBM has communicated all the 
current dispensing requirements under the draft policy to VA Chiefs of 
Pharmacy on several conference calls and through e-mail notifications. 
VA is pursuing Information Technology solutions regarding the use of 
label reprints and other OIG findings/recommendations and is exploring 
the ability of its Pharmaceutical Prime Vendor to provide standardized 
national inventory management tools.
    VA's long-term plan to address all of OIG's findings is dependent 
on the use of enhanced software capabilities to support a comprehensive 
inventory management system. The specifications for the enhancements 
were developed and submitted in 2005 to the VA's Office of Information 
and Technology as part of the Pharmacy Re-Engineering (PRE) project. 
The current plan is for this functionality to be available sometime in 
2011, depending on funding and development priorities.
    All CMOP contracting recommendations have been addressed. With the 
exception of rewriting the CMOP software to improve inventory 
accountability which is expected to be completed near the end of FY 
2010, all proposed actions to meet the OIG recommendations have been 
completed.
    Question 14: Why did the VA allow the directive on Drug 
Accountability Software to lapse in 2003? Are there plans for an 
updated directive?
    Response: VHA's directive on Drug Accountability was allowed to 
expire primarily due to the lack of standardized automated national 
tools to accomplish the requirements. Facilities reported difficulties 
trying to audit high cost drugs manually. They were unable to 
accurately reconcile inventories due to dispensing software 
limitations. It is PBM's belief that a policy which cannot be 
implemented in the field is not a good management practice; therefore, 
PBM allowed the directive to expire with the understanding that 
enhanced software development was due to be implemented in 2008 as part 
of the PRE project.
    After the Drug Accountability policy expired, VA's Chiefs of 
Pharmacy were advised that although it was no longer in effect, it 
would be prudent for them to continue some form of drug accountability 
oversight, using locally developed processes to aid in the detection of 
diversion of non-controlled substances. PBM recommended that sites take 
steps to limit the number of storage areas for high cost drugs and 
reduce inventory levels when possible.
    Though VHA still lacks the tools planned for PRE, PBM supports 
issuing a new directive with monitoring that can be accomplished using 
currently available tools. A draft policy has been developed and is 
currently undergoing review for concurrence. Once PRE inventory modules 
are developed and implemented, VHA will revise the policy to take 
advantage of the enhanced software capability.

                                 
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