CMS Pub. 100-18, ch. 6, § 30.1.5

Part D sponsor’s P&T committee will consider the following:

• The P&T committee must review for clinical appropriateness the practices and policies

for formulary management activities, such as prior authorizations, step therapies, quantity

limitations, generic substitutions, and other drug utilization activities that affect access.

P&T committee recommendations regarding these activities are advisory only and not

binding on the Part D sponsor.

• Formulary management decisions must be based on scientific evidence, and may also be

based on pharmacoeconomic considerations that achieve appropriate, safe, and cost

effective drug therapy.

• The P&T committees will be required to establish and document procedures to ensure

appropriate drug review and inclusion. This includes documentation of decisions

regarding formulary development and revision and utilization management activities (42

CFR §423.120(b)(1)(viii)). P&T committee recommendations regarding which Part D

drugs are placed on a sponsor’s formulary are binding on the Part D sponsor.

• Clinical decisions by the P&T committee should be based on scientific evidence and

standards of practice, including peer reviewed medical literature, well-established clinical

practice guidelines, and pharmacoeconomic studies, as well as other sources of

appropriate information.

• Drugs’ therapeutic advantages in terms of safety and efficacy must be considered when

selecting formulary drugs and placing them on formulary tiers.

• The P&T committee will make a reasonable effort to review a new FDA approved drug

product (or new FDA approved indication) within 90 days of its release onto the market

and will make a decision on each new FDA approved drug product (or new FDA

approved indication) within 180 days of its release onto the market, or a clinical

justification will be provided if this timeframe is not met.

• The P&T committee will evaluate and analyze treatment protocols and procedures related

to the sponsor’s formulary at least annually.

• The P&T committee will approve inclusion or exclusion of the therapeutic classes in the

formulary on an annual basis.

• Part D sponsors that change pharmacy benefit managers (PBMs) mid-year are required to

continue the existing formulary. Decisions regarding formulary inclusion made by the

previous PBM’s P&T committee are binding on the assuming PBM. CMS will not

approve negative formulary change requests for the purpose of aligning an existing

formulary with that of a new PBM.