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Avalere Report Shows Unapproved Prescription Drugs Dropped from CMS Formulary Reference File

WASHINGTON, May 15 /PRNewswire/ -- A new report, funded and released by Avalere Health, showed that CMS dropped more than 1,500 drug codes from its CY 2008 Part D Formulary Reference File. In response, commercial health plans dropped many of these drugs from their Medicare offerings in 2008, resulting in significantly smaller Part D formularies in 2008 compared to 2007. The CMS action was driven in part to remove hundreds of prescription drugs that were being marketed without FDA approval.

There is no definitive list of such marketed unapproved drugs, making it difficult for patients, pharmacists, and plans to determine which drugs are being marketed without FDA approval. Since, with few exceptions, the Medicare Modernization Act limits Part D subsidies only for those drugs with formal FDA approval, the Part D program is also dependent on knowing which drugs are being marketed without FDA approval. In addition to the several hundred marketed unapproved drugs removed from the CMS Formulary Reference File, the Avalere research confirmed the existence of several thousand drugs being marketed in the U.S. that have never been approved by the FDA.

"CMS, patients, physicians, insurance plans and other stakeholders need a clear and timely accounting of marketed unapproved drugs," said Jon Glaudemans, senior vice president of Avalere Health and co-author of the paper. "Up-to-date and user-friendly information about all marketed medications (approved and unapproved) and withdrawn drugs would improve clinicians' ability to prescribe safe and effective medications."

John A. Gans, PharmD, Executive Vice President and Chief Executive Officer at the American Pharmacists Association (APhA), commented on the Avalere Health research. "Since the inception of the Medicare Part D prescription drug benefit, pharmacists have played an integral role in ensuring the successes of the Medicare Part D prescription drug benefit. This new research conducted independently by Avalere Health brings to light important issues regarding the availability of information regarding unapproved drug products, changes to prescription drug coverage, and the resulting impact on patients, pharmacists, and others. APhA views this work as a positive contribution to healthcare discussions on improving medication use and advancing patient care."

CMS reduced the number of drugs on its "Formulary Reference File" -- the tool used by Part D plans to shape their Part D drug formularies -- from 7,100 to 5,500 in 2008. Using its DataFrame(R) database tool, CMS's public use file data, and public reference materials from the FDA, Avalere researchers sought to explain why drugs were deleted from this CMS file, what types of drugs were dropped, and how pharmacists, patients, and health plans may have been affected by CMS' changes.

Avalere found that CMS dropped drug codes from the Formulary Reference File that were connected to: a) unapproved FDA drugs; b) discontinued drugs; c) Part A or Part B products; d) products with redundant codes; and e) products not reimbursable under statute (such as nonprescription medications, and agents used for anorexia, weight loss, weight gain, or for cosmetic purposes).

CMS's changes to the CY 2008 Reference File had significant ripple effects to plans, patients, physicians, and pharmacists. For patients, changes in the formularies could result in their need to pay out-of-pocket for non-covered drugs, or transition to a comparable drug. Plans have the authority to decide whether or not to pay for the deleted drugs.

Unapproved prescription drugs listed in the formularies were likely older products cleared for marketing before 1962, the year that the FDA began requiring proof of efficacy. Before the requirement, drugs were approved based on safety, in compliance with the Federal Food, Drug, and Cosmetic Act of 1938. The products in this category were overwhelmingly medications used for sedation, pain relief, or cough and cold symptoms.

While the FDA is making concerted progress to identify and remove products with demonstrated safety and efficacy concerns, an estimated several thousand marketed unapproved products remain on the market. The issue is further complicated because many healthcare providers have likely unknowingly prescribed unapproved prescription drugs for decades. For a small number of these medications, there are no approved alternative therapies and patients -- who are stabilized on them -- depend on these drugs. Physicians and pharmacists consulted for this project stressed that not all unapproved products should be abruptly withdrawn.

The report concludes that information on all products -- approved or unapproved, repackaged or marketed directly -- should be readily accessible to health professionals, plans, CMS, through FDA databases and related resources. It suggests collaboration among these stakeholders to remedy the reporting process and information challenges that are interfering with the availability of information needed to guide important coverage and patient-care decisions.

Avalere's new report, "Part D Formularies: Opportunities for Further FDA/CMS Collaboration," was authored by Jon Glaudemans, Christine Park, and Brian Bruen of Avalere Health, and Patti Manolakis, PharmD. The report is available free of charge at Avalere will host an audio conference on this new research; information and registration can be accessed at

Avalere Health is a leading advisory company focused on business strategy and public policy. It serves a diverse client base, which includes Fortune 500 healthcare technology companies, federal government agencies, and major medical foundations. The company is organized into seven substantive areas -- Medicare, Medicaid, Reimbursement, Long-Term and Post-Acute Care, Health Information Exchange, Evidence-Based Medicine, and Education. Anchored by a comprehensive research engine and staffed by experts in business, medical product commercialization, and health policy, Avalere provides strategic guidance, objective analytic research, and quality educational programs focused on the full range of healthcare issues facing our nation.

Further information can be obtained at

SOURCE Avalere Health
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