[Federal Register Volume 72, Number 115 (Friday, June 15, 2007)]
[Notices]
[Pages 33208-33210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11558]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE Over-the-Counter Drug Demonstration Project

AGENCY: Department of Defense.

ACTION: Notice of a TRICARE over-the-counter drug demonstration 
project.

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SUMMARY: This notice is to advise interested parties of a demonstration 
project in which the Department of Defense will evaluate allowing 
selected over-the-counter (OTC) drugs to be included on the TRICARE 
uniform formulary. The Secretary will evaluate the costs/benefits and 
beneficiary satisfaction of providing OTC drugs under the pharmacy 
benefits program when the selected OTC drugs are determined to be 
clinically effective. The demonstration project will be available for 
beneficiaries within the United States, Puerto Rico, Virgin Islands, 
and Guam.

DATES: Effective Date: This demonstration project is mandated by 
Section 705 of the John Warner National Defense Authorization Act for 
2007, with an implementation deadline of May 1, 2007. Therefore, the 
Department of Defense is waiving the regulation (32 CFR 199.1(o)) 
requiring at least 30 days notice of a demonstration project prior to 
its effective date. Waiver of the notice period is deemed necessary to 
avoid delay in implementing program changes.

FOR FURTHER INFORMATION CONTACT: MAJ Travis Watson, TRICARE Management 
Activity, Pharmaceutical Operations Directorate, telephone (703) 681-
2890.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 705 of the John Warner National Defense Authorization Act 
for 2007 (hereafter Section 705) directed the Department of Defense to 
conduct a demonstration project to allow certain over-the-counter 
medications to be included on the uniform formulary under section 1074g 
of title 10, United States Code. Section 705 requires that OTC drugs 
provided under this demonstration project be made available through at 
least two of the following dispensing venues--military treatment 
facilities, TRICARE retail network pharmacies, or the TRICARE mail 
order pharmacy. The Department intends to initially offer the selected 
OTC drugs through the TRICARE mail order pharmacy and a limited number 
of designated military treatment facilities (no less than five per 
TRICARE region). Not all OTC drugs will be covered under this 
demonstration project. An OTC drug shall be made available to a 
beneficiary through the demonstration project if (a) the beneficiary 
has a prescription for a drug requiring a prescription; (b) the 
Pharmacy & Therapeutics Committee has determined

[[Page 33209]]

the OTC drug to be cost-effective and therapeutically equivalent to the 
prescription drug; and (c) the OTC drug has been included on the 
uniform formulary.
    Current law excludes cost sharing of OTC drugs (except insulin) 
under the Pharmacy Benefits Program. Section 705 requires the 
demonstration project to evaluate the clinical and cost effectiveness 
of OTC drugs as well as beneficiary satisfaction with the project. At 
the conclusion of not more than two years of the project, the Secretary 
will evaluate the hypotheses that substitution of selected OTC drugs 
under the TRICARE Pharmacy Benefits Program provides clinical and cost 
effectiveness along with beneficiary satisfaction, and submit a report 
to the Armed Services Committee of both the House and Senate that 
includes conclusions and recommendations for improving the provision of 
OTC drugs under the pharmacy benefits program and whether permanent 
legislative authority should be provided to cover OTC drugs under the 
pharmacy benefits program. Section 705 also authorizes the Department 
to continue the demonstration for up to one year after submitting the 
report if it is recommended that the Department should be granted 
permanent authority to provide OTCs.

B. Description of Demonstration Project

    (1) Inclusion of certain over-the-counter drugs. The Department of 
Defense Pharmacy & Therapeutics (P&T) Committee must find that the OTC 
drug is cost-effective and therapeutically equivalent to a prescription 
drug within a selected therapeutic class. The P&T Committee will 
expeditiously begin relative clinical and cost-effective evaluations of 
OTC drugs in therapeutic classes that would meet the intent of this 
requirement. The P&T Committee will review OTC drugs throughout the 
course of the demonstration project. Some potential candidates include 
omeprazole, an anti-ulcer/heartburn agent; loratidine, a non-sedating 
antihistamine; topical antifungals; and niacin, a cholesterol lowering 
agent. The minutes of the DoD Pharmacy & Therapeutics Committee (http://www.tricare.mil/pharmacy/PT_Cmte/default.htm) will record the 
selection of OTC drugs which are part of this demonstration project.
    (2) OTC drug availability through the demonstration project. There 
are two categories of beneficiaries who are eligible candidates for the 
demonstration: (1) Those who have a current prescription filled for a 
drug in the therapeutic class; and (2) those who have a new 
prescription for a prescription item that has an approved OTC drug 
equivalent, as defined by the program. For beneficiaries who have a 
currently filled prescription, the Pharmacy Data Transaction Service 
(PDTS) will be used to review a patient's medication history to verify 
whether they have received a therapeutically equivalent prescription 
drug that corresponds to the OTC drug covered under the demonstration 
project. For beneficiaries who have a new prescription, the process 
used to verify eligibility will depend upon the dispensing venue the 
beneficiary chooses to use. Not all OTC drugs eligible for dispensing 
through this project will be available at all dispensing venues. The 
Pharmacy Program Office will communicate OTC drug availability through 
the use of the TRICARE Web site (http://www.tricare.mil/pharmacy), 
public affairs outreach, and through the representative military 
beneficiary organizations.
    (3) Dispensing venues and project scope. This demonstration project 
is required to be conducted through at least two of the three points of 
service for dispensing prescriptions. Standard utilization management 
processes will be applied to the demonstration project consistent with 
current practices at TMOP, military treatment facilities, and the 
TRICARE Retail Pharmacy network.
    i. TRICARE Mail Order Pharmacy. The demonstration project will be 
initiated in the TRICARE mail order pharmacy. When a beneficiary 
receives a prescription product from TMOP, which has an OTC drug 
available for dispensing under this demonstration, the beneficiary will 
have their prescription filled, and additionally, they will receive a 
letter informing them about the demonstration and how to participate. 
The letter will consist of demonstration information and a pre-printed 
prescription for the OTC drug. In order to participate in the 
demonstration, the beneficiary must take the pre-printed prescription 
to their provider for signature. The beneficiary can send the signed, 
pre-printed prescription or a new prescription from the provider to 
TMOP for filling in place of the legend prescription. A provider's 
signature is required on either. Providers may send a prescription to 
the TMOP via facsimile or mail. When the prescription for the OTC is 
received by TMOP, all remaining refills (if any) will be filled with 
the OTC instead of the original prescription drug. The contractor shall 
accept either the signed pre-printed prescription or a new prescription 
from the provider.
    ii. Military treatment facilities. The Pharmacy Program Office in 
conjunction with the DoD P&T Committee will search for opportunities to 
find cost-effective OTC drugs that meet the intent of the program 
design. Many therapeutic drugs in drug classes with an equivalent OTC 
are more costly than the generic drug that can be obtained by the MTF 
with federal pricing. The number of military treatment facilities that 
will participate in the demonstration project will be consistent in 
scope with the requirements in Section 705, which allows the Department 
to conduct the demonstration throughout the entire pharmacy benefits 
program, or at a limited number of sites. If a limited number of sites 
are selected, the number may not be less than five in each TRICARE 
region. The Pharmacy Program Office will communicate OTC drug 
availability through the use of the TRICARE Web site (http://www.tricare.mil/pharmacy), public affairs outreach, and through the 
representative military beneficiary organizations. Notice of an 
opportunity to participate in the demonstration will be given to the 
beneficiary at the selected MTF by either the physician writing the 
prescription or by the MTF pharmacy dispensing the drug.
    iii. TRICARE retail pharmacy network. Upon the completion of 
contract changes and operational considerations, the demonstration 
project will be conducted within selected pharmacies of the TRICARE 
retail pharmacy network. The number and location of retail pharmacies 
that will participate in the demonstration project will be consistent 
in scope with the requirements in Section 705, which allows the 
Department to conduct the demonstration throughout the entire pharmacy 
benefits program, or at a limited number of sites. If a limited number 
of sites are selected, the number may not be less than five in each 
TRICARE region. The Pharmacy Program Office will communicate OTC drug 
availability through the use of the TRICARE Web site (http://www.tricare.mil/pharmacy), public affairs outreach, and through the 
representative military beneficiary organizations. Notice of an 
opportunity to participate in the demonstration will be given to the 
beneficiary at the selected retail network pharmacy by the pharmacy 
dispensing the drug through an electronic message sent to the 
pharmacist through the Pharmacy Data Transaction Service.
    (4) Cost sharing requirements. Beneficiaries will not be charged a 
cost

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share for OTC drugs received under this demonstration project.
    (5) Period of demonstration. This demonstration project will begin 
no later than May 1, 2007 in TMOP, and phased in at MTFs and/or retail 
pharmacies during the first year and the demonstration will last until 
the implementation of the combined TRICARE mail and retail contract 
(TPharm) which is approximately two years from the start date of the 
demonstration project.

    Dated: June 11, 2007.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, DoD.
[FR Doc. E7-11558 Filed 6-14-07; 8:45 am]
BILLING CODE 5001-06-P