Formulary policy to be shaped this year by Medicare, IT, and push for drug development

The number-one health policy issue for the new year is to find ways to keep healthcare costs under control. An aging population and more costly medical technology could increase current spending trends. These developments could have an impact on efforts to reduce the number of uninsured people in the United States and could prompt initiatives to make consumers more aware of treatment costs and options.

Concerns about increased spending on healthcare will mean a continued focus on the role played by formularies in shaping drug coverage and costs. The official launch of the Medicare Prescription Drug Plan will only keep these issues in the spotlight, as expanded government payment for prescription drugs boosts pressure to ensure appropriate prescribing and patient use of the most cost-effective treatments.

At the same time, public concerns about drug safety present challenges to both regulators and manufacturers to develop more safe and effective new medications and to ensure proper use of existing ones. Hovering over all these developments is the ongoing drive to better prepare the nation for medical emergencies. Disruptions in the healthcare system due to Hurricane Katrina and continued warnings of a possible influenza pandemic are escalating public health planning efforts. These responsibilities point directly to the need to establish a comprehensive national health information system.

Numerous factors will shape pharmacy and therapeutics (P&T) committee decisions and operations in the coming year, starting with these top 5:

1. Launch of Medicare drug coverage. Health plans and insurers surprised everyone in 2005 by offering multiple prescription drug plans (PDPs) to provide drug benefits for seniors this year. The process of implementing the complex drug benefit program has generated a very public discussion of formulary operations, including coverage decisions, classes and categories, tiering, and coinsurance policies. PDPs are keeping premiums low and coverage options broad to attract Medicare beneficiaries to the new program, but patient costs are expected to rise and formularies could become more restricted as smaller and less experienced plans drop out. Federal administrators will be keeping a close watch on formulary "updates" and policy changes adopted by PDPs for 2007 to protect seniors from harmful policies.

2. Push for electronic health information systems. Despite high upfront costs, provider resistance, and concerns about patient privacy, visible progress is being made in establishing a national electronic health records (EHR) system, along with electronic prescribing. Insurers, payors, and providers are supporting standards-setting activities and investing in e-health infrastructures, largely due to pressure from public and private payors. E-prescribing is expected to help prescribers comply with formulary policies and may be among the first e-health applications to be implemented.

3. Focus on quality. Medicare and other payors are prompting hospitals to report more quality information, and physicians are recognizing the need to support such initiatives. The rise in consumer-directed healthcare will fuel demand for more information on treatment options and costs-particularly for prescription drugs. E-health systems also promise to make formulary coverage policies more transparent and drive adherence to practice guidelines and evidence-based medicine.

4. Continued concerns about drug safety. FDA is taking steps to restore public confidence in its ability to detect "signals" of adverse events involving marketed drugs and to communicate emerging safety concerns to patients and healthcare professionals. The agency also is watching drug research sponsors closely to ensure that they study new drug candidates sufficiently to detect potential risks. Policymakers will continue to press for expanded reporting of adverse drug events by healthcare professionals and for added authority to ensure completion of agreed-upon postmarketing studies by drug companies.

5. Push for drug development. A growing concern in the biomedical community is that FDA staff members could adopt a "go-slow" attitude regarding new drug approvals to avoid bringing to market any medications that could turn out to have safety problems. New drug applications (NDAs) have declined in recent years, particularly for highly innovative therapies. In response, FDA officials are promoting the agency's Critical Path initiative as a roadmap for developing innovative test methods and research strategies that can improve the clinical research and drug development processes. FDA seeks increased collaboration with industry and academia to jointly assess potential biomarkers and clinical research methods that could make drug development more efficient and more productive.

Ms Wechsler is a veteran reporter specializing in federal and state healthcare and pharmaceutical issues.