Memo:

TO:            Executive Board and Council Leaders                      

FROM:     Lorraine Simpkins, Health Benefits Specialist

                  Deborah Stayman, Health Program Analyst

DATE:      11/18/08              

RE:           2009 Empire Plan Flexible Formulary Drug List

In accordance with the Prescription Drug Formulary side letter negotiated in the 2007-2011 PS&T Contract, effective 1/1/09, United Healthcare (UHC), the insurer for the Empire Plan Prescription Drug Program, will be permitted flexibility in the administration of the Empire Plan Preferred Drug List.  This flexibility will result in the renaming of the Preferred Drug List to the Flexible Formulary Drug List.

The Flexible Formulary will apply to employees represented by PEF, UUP, PBA, and DC37, as well as all unrepresented state employees.  During PS&T contract negotiations, GOER advised PEF that the three unions that had already reached agreements with the State - CSEA, UUP, and DC37 - had all agreed to the implementation of the Flexible Formulary.  However, as of today, CSEA has not agreed to implement the Flexible Formulary.  In addition, the Flexible Formulary will not apply to the unions that haven’t ratified new contracts.  Employees represented by CSEA and the other unions without the Flexible Formulary will have a slightly higher biweekly premium contribution as a result.      

Flexible Formulary

UHC, in consultation with the state agencies responsible for administering the New York State Health Insurance Program, has finalized the 2009 Empire Plan Flexible Formulary Drug List (see   attached).  This list identifies the most commonly prescribed generic and brand name drugs included on the Flexible Formulary.  This is not a complete list of prescription drugs on the Flexible Formulary or covered under the Empire Plan.

The purpose of the Empire Plan Flexible Formulary is to reduce unnecessary costs without impacting clinically appropriate medication options for members and their physicians.  This will be accomplished by:

·         Excluding coverage for a small number of prescription drugs;

·         Placing brand-name drugs on the Empire Plan Flexible Formulary Drug List that provide the best overall healthcare value to the Plan; and

·         Applying the highest copayment to non-preferred brand-name drugs that provide no clinical advantage over generic or preferred brand-name drug alternatives.

Effective 1/1/09, UHC is excluding thirteen (13) brand name drugs from the Empire Plan Flexible Formulary Drug List.  Drugs excluded from the Flexible Formulary will not be covered.

UHC’s Pharmacy and Therapeutics Committee has determined that these drugs have no clinical advantage over other generic and brand name medications in the same therapeutic class.  As required by the Flexible Formulary side letter, the drugs excluded from the Formulary must:  1) contain an active ingredient available in and therapeutically equivalent to another drug covered in the same therapeutic class; or 2) contain an active ingredient which is a modified version of and therapeutically equivalent to another covered Prescription Drug Product; or 3) are available in over-the-counter form or comprised of components that are available in over-the-counter form or equivalent.  Therapeutically equivalent alternatives are available for each of the excluded drugs.  These therapeutically equivalent alternatives can be substituted with the expectation that the substituted drug will produce the same clinical effect and have the same general safety profile as the excluded drug.  There is no appeal process for drugs excluded from the Flexible Formulary.  

The brand name drugs that will no longer be covered under the Empire Plan effective 1/1/09 are:

The removal of Nexium and Prevacid are likely to generate the most concern.  Nexium and Prevacid belong to a class of drugs called Proton Pump Inhibitors (PPIs), which are used to treat gastro-intestinal conditions like heartburn and acid reflux.  The therapeutically equivalent alternative recommended by UHC is the generic drug omeprazole.  For the period 1/1-4/30/09, the Empire Plan Prescription Drug Program will offer an instant rebate of the applicable generic copay for omeprazole (10, 20, and 40mg strengths).  In other words, enrollees will not have to pay a copay when filling a prescription for omeprazole during this 4-month period.   

Preferred Brand to Non-Preferred Brand Name Drug

Effective 1/1/09, UHC is moving twelve (12) brand name drugs from the preferred (Level 2) mid-range copay category to the non-preferred (Level 3) highest copay category.  For each of these drugs, there are therapeutic alternatives.  The alternatives, which may be either generic or brand name drugs or both, are considered equally effective in treating the same condition. The brand name drugs moving from Level 2 to Level 3 are indicated on the following page.

 Non-Preferred to Preferred Brand Name Drug

In addition to the twelve (12) brand name drugs moving from preferred (Level 2) mid-range copay to non-preferred (Level 3) highest copay category, UHC is also moving ten (10) brand name drugs in the other direction – from non-preferred (Level 3) to preferred (Level 2).  The brand name drugs being moved to the preferred (Level 2) category effective 1/1/09 are indicated below:

Disruption Letters

On 11/20/08, UHC will begin mailing letters to all enrollees potentially impacted by the Flexible Formulary changes.  Four different letters will be used and are categorized as follows:  1) enrollees using one of the excluded Proton Pump Inhibitor (PPI) drugs (Nexium or Prevacid) for the treatment of heartburn or GERD; 2) enrollees using one of the excluded Human Growth Hormone drugs; 3) enrollees using any of the other excluded drugs; and 4) enrollees using a drug moving from copay Level 2 to copay Level 3.  Samples of the four different letters are attached.

Health Care Spending Account

Since the Flexible Formulary changes may affect enrollees’ out-of-pocket expenses for their prescription drugs, members who enrolled in the Health Care Spending Account (HCSAccount) may be concerned that their election amount will now be too low or too high.  Fortunately, the state allows employees who enrolled in the HCSAccount by the 11/14/08 deadline to change their election amount.  After a member enrolls in the HCSAccount, FBMC, the HCSAccount administrator, will send him or her a letter confirming the amount set aside for 2009.  Members can change their election amount on this letter and return it to FBMC.  FBMC must receive the request for a change no later than 12/10/08.  Members who have questions regarding the procedure for changing their election amount should contact FBMC at 1-800-342-8017.

Additional Information

For more information regarding the Flexible Formulary, please refer to the attached Frequently Asked Questions (FAQs).  These FAQs will be posted in the Health Benefits section of the PEF web site and will be periodically updated as we receive more questions from members.

 If you have any questions regarding this memo, please contact Deborah Stayman or Lorraine Simpkins at PEF headquarters, ext. 283.

cc:                  Roger Scales, Director of Labor Relations

                      Robert Carrothers, Director of Contract Administration