TESTIMONY OF THE MAINE MEDICAL ASSOCIATION

IN SUPPORT OF

L.D. 696, AN ACT REGARDING INSURANCE AND FINANCIAL SERVICES

Joint Standing Committee on Insurance & Financial Services
Room 220, Cross State Office Building
Augusta, Maine
Tuesday, February 27, 2018, 1:00 p.m.

Good afternoon Senator Whittemore, Representative Lawrence, and Members of the Joint Standing Committee on Insurance & Financial Services.  I am Andrew MacLean, Deputy EVP & General Counsel of the Maine Medical Association, and I am pleased to lend our support to the proposed amendment to L.D. 696.

The Maine Medical Association is a professional association representing more than 4200 Maine physicians, residents, and medical students whose mission is to support Maine physicians, advance the quality of medicine in Maine, and promote the health of all Maine citizens.

The MMA acknowledges the need for health insurance cost containment mechanisms in our current health care system and we have supported Maine’s “generic and therapeutically equivalent substitution” statute, codified in the Maine Pharmacy Act at 32 M.R.S.A. §13781 since at least 1987.  On the other hand, MMA has objected to increasing intrusion into the physician-patient relationship by health insurance carriers and their pharmacy benefit managers and has supported reasonable restrictions on mechanisms like “step therapy” and generic substitution with products that are not therapeutically equivalent, such as generic drugs for epilepsy from different manufacturers that have different ingredients causing seizures in some patients.  We have the same concerns about so-called “non-medical switching,” whereby a patient with a complex, chronic condition may be forced to change drugs destabilizing the management of the condition because of a change in plan design to save costs.

Standing AMA policy supports this legislation and I have set out the relevant policy statements below.

Drug Formularies and Therapeutic Interchange H-125.991

It is the policy of the AMA:

1. That the following terms be defined as indicated:
   1. Formulary: a compilation of drugs or drug products in a drug inventory list; open (unrestricted) formularies place no limits on which drugs are included whereas closed (restrictive) formularies allow only certain drugs on the list;
   2. Formulary system: a method whereby the medical staff of an institution, working through the pharmacy and therapeutics committee, evaluates, appraises, and selects from among the numerous available drug entities and drug products those that are considered most useful in patient care;
   3. Pharmacy & Therapeutics (P&T) Committee: an advisory committee of the medical staff that represents the official, organizational line of communication and liaison between the medical staff and the pharmacy department; its recommendations are subject to medical staff approval;
   4. Therapeutic alternates: drug products with different chemical structures but which are of the same pharmacological and/or therapeutic class, and usually can be expected to have similar therapeutic effects and adverse reaction profiles when administered to patients in therapeutically equivalent doses;
   5. Therapeutic interchange: authorized exchange of therapeutic alternates in accordance with previously established and approved written guidelines or protocols within a formulary system; and
   6. Therapeutic substitution: the act of dispensing a therapeutic alternate for the drug product prescribed without prior authorization of the prescriber.
2. That our AMA reaffirms its opposition to therapeutic substitution (dispensing a therapeutic alternate without prior authorization) in any patient care setting.
3. That drug formulary systems, including the practice of therapeutic interchange, are acceptable in inpatient hospital and other institutional settings that have an organized medical staff and a functioning Pharmacy and Therapeutics (P&T) Committee, provided they satisfy the following standards:
   1. The formulary system must:
      1. have the concurrence of the organized medical staff;
      2. openly provide detailed methods and criteria for the selection and objective evaluation of all available pharmaceuticals;
      3. have policies for the development, maintenance, approval and dissemination of the drug formulary and for continuous and comprehensive review of formulary drugs;
      4. provide protocols for the procurement, storage, distribution, and safe use of formulary and non-formulary drug products;
      5. provide active surveillance mechanisms to regularly monitor both compliance with these standards and clinical outcomes where substitution has occurred, and to intercede where indicated;
      6. have enough qualified medical staff, pharmacists, and other professionals to carry out these activities;
      7. provide a mechanism to inform the prescriber in a timely manner of any substitutions, and that allows the prescriber to override the system when necessary for an individual patient without inappropriate administrative burden;
      8. provide a mechanism to assure that patients/guardians are informed of any change from an existing outpatient prescription to a formulary substitute while hospitalized, and whether the prior medication or the substitute should be continued upon discharge from the hospital;
      9. include policies that state that practitioners will not be penalized for prescribing non-formulary drug products that are medically necessary; and
      10. be in compliance with applicable state and federal statutes and/or state medical board requirements.
   2. The P&T Committee must:
      1. objectively evaluate the medical usefulness and cost of all available pharmaceuticals (reliance on practice guidelines developed by physician organizations is encouraged);
      2. recommend for the formulary those drug products which are the most useful and cost-effective in patient care;
      3. conduct drug utilization review (DUR) activities;
      4. provide pharmaceutical information and education to the organization's (e.g., hospital) staff;
      5. analyze adverse results of drug therapy;
      6. make recommendations to ensure safe drug use and storage; and
      7. provide protocols for the timely procurement of non-formulary drug products when prescribed by a physician for the individualized care of a specific patient, when that decision is based on sound scientific evidence or expert medical judgment.
   3. The P&T Committee's recommendations must be approved by the medical staff;
   4. Within the drug formulary system, the P & T Committee shall recommend, and the medical staff must approve, all drugs that are subject to therapeutic interchange, as well as all processes or protocols for informing individual prescribing physicians; and
   5. The act of providing a therapeutic alternate that has not been recommended by the P&T Committee and approved by the medical staff is considered unauthorized therapeutic substitution and requires immediate prior consent by the prescriber; i.e., authorization for a new prescription.
4. That drug formulary systems in any outpatient setting shall operate under a P&T Committee whose recommendations must have the approval of the medical staff or equivalent body, and must meet standards comparable to those listed above. In addition:
   1. That our AMA continues to insist that managed care and other health plans identify participating physicians as their "medical staff" and that they use such staff to oversee and approve plan formularies, as well as to oversee and participate on properly elected P&T Committees that develop and maintain plan formularies;
   2. That our AMA continues to insist that managed care and other health plans have well-defined processes for physicians to prescribe non-formulary drugs when medically indicated, that this process impose minimal administrative burdens, and that it include access to a formal appeals process for physicians and their patients; and
   3. That our AMA strongly recommends that the switching of therapeutic alternates in patients with chronic diseases who are stabilized on a drug therapy regimen be discouraged.
5. That our AMA encourages mechanisms, such as incentive-based formularies with tiered co-pays, to allow greater choice and economic responsibility in drug selection, but urges managed care plans and other third party payers to not excessively shift costs to patients so they cannot afford necessary drug therapies.

Patient Protection from Forced Switching of Patent-Protected Drugs H-125.978

Our AMA will: (1) raise awareness among physicians of the strategy that could be used to limit the value to manufacturers of forced switching of brand formulations of prescription drugs; and (2) advocate that the U.S. Food and Drug Administration (FDA) and Congress ascertain the pervasiveness of this practice and advance solutions that strike an appropriate balance between innovation incentives and competition in order to support patient access to the newest treatments as well as those that are cost-effective.

Opposition to Payment for Prescription-Switching H-125.989

The AMA: (1) denounces the practice of pharmacists recommending to patients that prescriptions be changed to products manufactured by companies which pay pharmacists upon completion of such prescription-switching; and (2) denounces the practice by companies of offering payments to pharmacists in exchange for recommending changes in prescriptions.

Thank you for considering the views of the MMA on L.D. 696.  I would be happy to respond to any questions you may have.