The DoD pharmacy program dispenses close to 2.8 million prescriptions each week at a cost of $6.7 billion in 2011, about 14% of the department’s total healthcare costs. The overall DoD health budget remains an issue of concern, as healthcare costs have greatly increased since 2001. The responsible management of this budget, in line with President Obama’s initiatives to decrease overhead and wasteful spending, is a top priority. As initiatives to control DoD’s future healthcare costs are planned, the TRICARE Pharmaceutical Operations Directorate continues to work on maximizing efficiencies while encouraging beneficiaries to make responsible choices when obtaining their prescriptions.

Rear Adm. Thomas McGinnis, RPh, Chief of the TRICARE Mangement Activity Pharmaceutical Operations Directorate

During 2011, TRICARE realized great success utilizing formulary-management tools such as step therapy and the TRICARE Uniform Formulary’s three-tier structure; educating beneficiaries; and leveraging contracts. The implementation and ongoing evolution of the Federal Ceiling Pricing (FCP) program has collected more than $2.7 billion in refunds thus far. These actions significantly narrowed the gap between mail-order and retail pharmacy costs to DoD. However, the retail venue remains the most costly for many pharmaceuticals, compared with military-treatment facilities (MTFs) and mail order. Consequently, TRICARE continues to encourage the use of cost-effective points of service while assuring equitable access to pharmaceuticals.

Copay changes effective Oct. 1, 2011, have resulted in modifications in beneficiary behavior and market movement, with subsequent savings for the DoD. While the cost savings are important for best management of the DoD budget, the dynamics of the copay changes; FCP refunds; voluntary refunds; new generic availability due to patent expirations on branded drugs; and diligent use of formulary-management tools pose some management challenges for TRICARE. Ultimately, these changes will reach a state of equilibrium and require further strategic planning and decisions to ensure continuation of a quality pharmacy program.

DoD’s Military Health System adopted the Quadruple Aim model of care to attain its main goal of readiness while utilizing cost-effective methods, supporting a healthy population and providing positive healthcare experiences for our beneficiary population. In 2011, the TRICARE Pharmacy Operations Directorate focused on managing per-member, per-year pharmacy costs as part of the Quadruple Aim and will maintain this focus for the year ahead by increasing the use of lowest-cost points of service, maximizing the use of available technology and continuing to support cost-effective pharmacy readiness for deployed servicemembers.

Priorities for 2012

Readiness: Continued emphasis on deployed active-duty servicemembers

U.S. Air Force Capt. Kevin Farrow, right, a pharmacist with the 60th Medical Group, dispenses medications to a woman during a medical and dental readiness training exercise at Cumuto Barracks in Trinidad and Tobago April 9, 2011, in support of Fuerzas Aliadas Humanitarias (FA HUM) 2011. FA HUM is a U.S. Southern Command-sponsored multinational exercise that is concentrated on improving how civilian, government and military agencies from the United States, the Caribbean and Central America respond to natural disasters in the region. (U.S. Army photo by Miguel A. Negron/Released)

TRICARE’s first priority remains supporting our active-duty servicemembers, with particular emphasis on deployed troops. The DoD’s Prescription Medication Analysis and Reporting Tool (PMART) rapidly and accurately assesses the medication needs of deploying servicemembers and flags patients who are taking medications that might be unsuitable for the deployed environment, such as those that require refrigeration or frequent monitoring. Additionally, PMART flags servicemembers who might have conditions that require additional deployment consideration.

PMART, a menu-driven tool, is used by all of the armed services and has become invaluable in preventing deployed troops from experiencing problems related to prescription medication. In the past year, PMART provided 643 reports reviewing 7.5 million prescriptions for more than 1.5 million deploying servicemembers. By identifying individual prescription needs before deployment, troops can deploy with a six-month supply of medication, then receive refills through the TRICARE Pharmacy Home Delivery Program. This means forward clinics do not have to stock large quantities of drugs in addition to those which treat acute needs, saving a significant amount of money in supply costs by eliminating the need to purchase and stock drugs that might never be used. This efficient practice supports readiness, responsible budgeting and safety for our deployed troops.

To further facilitate the ease and cost-savings provided by the Home Delivery Program, the Army released an automated prescription tool for their healthcare providers to use when writing prescriptions for deploying soldiers. This tool replaced the wasteful paper prescription and registration forms and auto-populates the drug and soldiers' information from a secure database. The automated prescription tool is available at all Army soldier-readiness sites.