2018 Issues

Legislation: Clinicians Must Be Involved in Formulary Design, Purchasing

by Sandra Basu

May 13, 2018
VA’s Consolidated Mail Outpatient Pharmacy (CMOP) in Charleston, SC. New legislation is seeking to increase clinician input into formulary decisionmaking.

WASHINGTON — Legislation to prevent VA from outsourcing creation of its drug formulary and to require more input from medical professions is being considered in Congress.

The bipartisan bill was introduced by House Committee on Veterans Affairs Subcommittee on Oversight and Investigations Chairman Jack Bergman (R-MI) and fellow committee members Reps. Scott Peters (D-CA), Jim Banks (R-IN) and Neal Dunn (R-FL).

In addition to preventing VA from outsourcing the creation of its formulary, it would require the agency to have medical professionals with relevant expertise making formulary decisions and conducting formulary analyses, instead of administrative staff.

The bill also requires that VA provide the Senate and House Committees on Veterans’ Affairs a list of each employee making formulary decisions with information about relevant medical expertise.

A bill description explained that “doctors and nurses are directly accountable for the quality of health care they provide to veterans and have the best knowledge of the instruments and supplies they use.”

“Unfortunately, the system for purchasing medical and surgical supplies has gone off track because unqualified administrators were deciding which products physicians get to use. Our legislation will put medical experts back in charge and prevent the VA from making the same mistakes again,” Bergman pointed out.

The bill description explained that “VA is now struggling to fix the medical- surgical formulary and administer the [Medical/Surgical Prime Vendor (MSPV) program] at the same time.”

“This legislation would direct VA to fix its medical-surgical formulary and ensures that qualified medical professionals make formulary decisions,” it stated.

GAO Report

The bill was in response to a Government Accountability Office (GAO) report last year which cited problems with VA’s new method of purchasing medical and supplies, implemented in late 2016. The program, known as the Medical Surgical Prime Vender-Next Generation (MSPV-NG), was designed to replace its legacy program.

Among the problems cited was that, while the new program was designed to streamline the purchasing of medical devices at the VA, as of June 2017, only about a third of the items on the initial version of the formulary “were being ordered in any significant quantity by medical centers, indicating that many items on the formulary were not those that are needed by medical centers.”

One of the problems found by GAO was that VA did not have enough clinician input into its formulary but relied on data from previous clinician purchases to determine the initial formulary.

“The MSPV-NG program office initially developed requirements for items to be included in the formulary based almost exclusively on prior supply purchases, with limited clinician involvement,” the report explained.

VA had determined that this “would be a good representation of medical centers’ needs and that clinician input would not be required for identifying which items to include in the initial formulary,” according to report authors.

GAO noted, however, that using purchase data to develop the formulary rather than clinician input “stood in sharp contrast to those of the leading hospital networks we met with, which rely heavily on clinician input.”

The report pointed out that VA made some changes in the second phase of requirements development by increasing the level of clinical involvement but “has not yet achieved its goals for utilization and cost avoidance.”

At a hearing in December, VHA Acting Chief Procurement and Logistics Officer Ricky Lemmon acknowledged that VA needed to make its medical and surgical product formulary more robust.

While Lemmon said that “hospitals have ways to get the products they need,” he conceded that VA needed to “make it easier for them to get the products and assure taxpayers are getting good value.”

He explained in his testimony that “VHA has decided to move forward with modifying the current contracts or developing replacement contracts to rectify the issues identified in the GAO audit.”

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