CMS Pub. 100-18, ch. 6, § 30.2.7

Regardless of the classification system chosen, CMS will review and approve drug lists that are

consistent with best practice formularies currently in widespread use today. The current

formulary requirements are subject to change and/or revision.

CMS reviews formulary drug lists with respect to the following areas:

• CMS evaluates the sufficiency of a Part D sponsor’s formulary categories and classes in

conjunction with the formulary drug list to ensure that the formulary provides access to

an acceptable range of Part D drug choices.

• Consistent with 42 CFR §423.120(b)(2)(i), each formulary is reviewed for inclusion of at

least two Part D drugs for each category and class submitted on the formulary file

(except as noted in §423.120(b)(ii)).

• CMS will review tier placement to ensure that the formulary does not substantially

discourage enrollment of certain beneficiaries. When developing their formulary tier

structure, sponsors should utilize standard industry practices. Tier 1 should be considered

the lowest cost-sharing tier available to beneficiaries. Any subsequent tiers within the

formulary structure will be higher cost-sharing tiers in ascending order, except that plans

may assign a low cost share to Tier 5 or 6 when assigned as a Select Care tier. For

example, drugs in Tier 3 will have a higher cost-share for beneficiaries than drugs in Tier

2. Best practices in existing formularies and preferred drug lists generally place drugs in

a less preferable position only when drugs that are therapeutically similar (i.e., drugs that

provide similar treatment outcomes) are in more preferable positions on the formulary.

The CMS review will focus on identifying drug categories that may substantially

discourage enrollment of certain beneficiaries by placing drugs in non-preferred tiers in

the absence of commonly used therapeutically similar drugs in more preferred positions.

• CMS will analyze formularies to determine whether appropriate access is afforded to

drugs or drug classes addressed in widely accepted treatment guidelines which are

indicative of general best practice. Examples of these may include asthma, diabetes,

chronic stable angina, atrial fibrillation, heart failure, thrombosis, lipid disorders,

hypertension, chronic obstructive pulmonary disease, dementia, depression, bipolar

disorder, schizophrenia, benign prostatic hyperplasia, osteoporosis, migraine,

gastroesophageal reflux disease, epilepsy, Parkinson’s disease, end stage renal disease,

hepatitis, tuberculosis, community acquired pneumonia, rheumatoid arthritis, multiple

sclerosis and HIV. Part D sponsors should be aware of treatment guidelines impacting

those enrollees residing in LTC facilities, such as CDC’s annual Morbidity and Mortality

Weekly Report (MMWR) on prevention and control of influenza. This list of conditions

does not represent an exhaustive list, but merely serves as another check in the review

process.

• CMS will analyze the availability of the most commonly prescribed drug classes for the

Medicare population (Appendix D). This list is derived from Part D claims data. The

drugs identified will be expanded to the class level and used in the formulary review

process. CMS understands that sponsors will not provide identical coverage of these

drug classes, and CMS’ review will focus on ensuring that sponsors present a balanced

formulary. These drug classes will cover common diseases and conditions, and will

allow CMS to ensure that sponsors are covering the most widely used medications, or

therapeutically similar medications, for the most common conditions.

• CMS will review all Part D sponsors’ formularies to ensure they contain all commercially

available vaccines (unless excluded due to available reimbursement under Part B, e.g.,

influenza or pneumococcal vaccines, or if a commercially available vaccine

manufacturer does not participate in the coverage gap discount program). Sponsors will

only be allowed to use drug utilization management tools to:

o Assess the necessity of vaccines that are less commonly administered in the

Medicare population, such as anthrax and yellow fever vaccines;

o Facilitate use of vaccines in line with Advisory Committee on Immunization

Practices (ACIP) recommendations; and

o Evaluate potential reimbursement of those vaccines that could be covered under

Part B when directly related to the treatment of an injury or direct exposure to a

disease or condition (e.g., tetanus).

• UM restrictions will also be evaluated as part of the formulary content review. In

addition to ensuring that the use of these tools are consistent with industry best practices,

CMS will also compare all sponsors’ formulary submissions to analyze the comparative

use of UM tools. When outliers are identified, CMS will request a clinical justification

that supports the use of the submitted edits.

All formularies will be evaluated using the criteria above in this section. Outliers for each area

of review will be further evaluated by CMS to determine whether the outlier is deemed

potentially discriminatory. Examples of this may include a lack of appropriate drug classes to

treat certain diseases, a lack of sufficient drugs in a therapeutic class, inappropriate tier

placement that would discriminate against a group of beneficiaries, or missing drugs that could

discourage certain types of beneficiaries from enrolling in the plan. If any of the outliers appear

to create problems of access, sponsors will have the opportunity to present reasonable clinical

justifications.