I've heard about prior authorization and drug quantity limitation programs that encourage proper drug use. Can you explain these programs?

A Focus on Prior Authorization and Quantity Limitation Programs:

Prior Authorization Program
A prior authorization (PA) program works by establishing criteria for the dispensing of certain drugs. The drugs commonly included in PA programs are those that are very expensive, have off-label (unapproved by the FDA) uses, and have the potential for misuse. The drug most commonly used as an example when discussing PA programs is growth hormones. Growth hormones are very expensive, have off-label uses, and to the extent off-label use is not approved by the FDA, growth hormones can be misused.

The drugs that are included in a PA program are treated as excluded drugs. Without an authorization, claims for these drugs are automatically denied. However, as part of the denial process, the pharmacy benefit manager (PBM) sends a message to the pharmacy indicating that an authorization for the claim is required.

How this authorization is obtained depends upon the plan sponsor. Ideally, the authorization is obtained before the patient goes to the pharmacy and the claim is never denied. Regardless, most plan sponsors require the prescribing physician to contact the PBM for approval. The PBM asks the prescriber questions about the patient to confirm the clinical appropriateness of the prescription. These questions primarily focus on the results of specific diagnostic tests, patient symptoms, and other clinical measurements. Although there can be variations to the scenario described above, this is the most common process.

In the growth hormone example, these drugs are very expensive and can be prescribed for treatments other than assisting growth in children. A PA program is one management option if a plan sponsor wants to pay for the appropriate use, but does not want to pay for other uses (e.g., anti-aging therapy in adults). The PA program requirement for growth hormones might specify that the patient be under a certain age, and meet certain clinical requirements related to size and the potential for growth. The drug would not be covered for patients who do not meet these requirements. Growth hormones would not be covered if there is no potential for additional growth, regardless of the patient's age and size.

The drugs selected for a PA program must be chosen carefully. There is an administrative cost to the PBM managing these programs. This cost is normally incurred on a per authorization request processed basis. If a low cost drug is targeted, the administrative cost of processing the authorization request may exceed the savings generated by an individual claim. If a PBM appropriately approves 99% of the claims for a high-cost drug, the total cost of administering the program may exceed the total savings generated regardless of the drug's cost. Drugs best suited for PA are relatively expensive, and for which a significant proportion of the requested authorizations are denied.
 

Quantity Limitation Program
Most plan sponsors establish general parameters regarding the days supply and quantity of a given drug that a patient may receive. For example, this limit may be up to a 30-day supply regardless of the drug. Recently, however, with the greater availability of information about drugs, drug cost increases, concerns regarding quality health care, and other issues, the willingness or even need to establish drug specific limits has increased.

Due to the lack of an industry-standard term, and for the purposes of this article, we will refer to the PBM ability to establish drug-specific limits as quantity limitation (QL) programs. QL programs control the quantity (number of units or tablets) or the number of prescriptions a patient may receive for a specified drug. A QL program can work independently or as a supplement to a PA program. Features of a QL program can be implemented on a patient-by-patient basis or for all beneficiaries.

The goal of a QL program is to encourage appropriate drug use. If a drug was approved by the FDA based on a patient receiving a 10-day course of treatment, then it may be in the patient's best interest that prescriptions be limited to a 10-day supply. For example, the new flu drug Relenza is intended to be used as a two-day course of treatment. Some plan sponsors put specific limits on this drug so patients cannot get more than a 2-day course of treatment.

A separate, somewhat unrelated goal of a QL program is to establish the maximum amount that a plan sponsor is willing to pay for a given drug. Establishing a maximum amount is particularly popular for the growing category of "lifestyle drugs."

For example, most plan sponsors who cover Viagra allow only 6 to 8 pills per month. Although some might suggest this limitation is related to appropriate use, it also establishes the maximum amount the plan sponsor will pay for the drug each month. Putting limitations on drug quantities covered by a plan does not prevent patients from purchasing more themselves; it just defines the plan's contribution.

Similar to PA programs, drugs included in QL programs are drugs with the potential for excessive or inappropriate use. To the extent that QL programs simply establish maximum quantities and daily supplies for specific drugs, there should not be any additional administrative charges.

Your PBM should be able to review your utilization history and identify the drugs that would be most effectively managed through a PA and/or QL program. Although the PBM cannot be expected to guarantee or to accurately predict the success of these programs, your PBM should be able to discuss its past success with similar populations and customers. This should include a discussion of the number of patients affected, the cost incurred, and the potential savings.