Evolution of the TRICARE Pharmacy Program (2024)

The National Defense Authorization Act required the establishment of a Pharmacy & Therapeutics committee (P&T) for fiscal year 2000. Its purpose was to develop and maintain a Uniform Formulary of medications—a list of brand name and generic drugs and supplies that TRICARE covers—which provides pharmacy benefits in the outpatient setting.

The TRICARE Uniform Formulary provides three points of service for prescription dispensing: military pharmacies, home delivery (mail order), and retail network pharmacies located in the U.S. and several U.S. territories.

The committee meetings are held quarterly, with recommendations determining which medications are included on the Uniform Formulary based on clinical and cost-effectiveness of the agents. The DOD P&T committee recommendations are then discussed publicly with the Beneficiary Advisory Panel.

The Beneficiary Advisory Panelis comprised of nongovernmental organizations representing DOD beneficiaries, pharmacy contractors and TRICARE network providers. Federal law requires that the BAP review and comment on the DOD P&T committee recommendations for implementing formulary changes to Tier 3 status, pre-authorization criteria, and implementation periods. The BAP is unique in that it gives beneficiaries a voice about what medications are included on the formulary, while providing transparency to what is often an unpublicized process in other health systems. Following the BAP comments, the final formulary decisions are reviewed and signed by the director of the Defense Health Agency.

Beginning in October 2007, the DOD took measures to improve communication with beneficiaries concerning formulary changes. Among the new measures, patient-specific notification letters were mailed to beneficiaries impacted by a variety of formulary changes. Examples include an increase in the cost-share (Tier 3 status), and a change from a preferred to a non-preferred status, which can include, but is not limited to, new step therapy or pre-authorization requirements.

TRICARE added a limited number of OTC drugs to the formulary and made them available at all three points of service: military pharmacies, home delivery, and at retail network pharmacies. Additionally, a variety of OTC products are available only at military pharmacies. The DOD P&T committee reviews the OTC drug classes to determine which drugs should and should not be covered, and occasionally an OTC drug will be removed from the benefit, in which case affected beneficiaries are notified.

Working with several avenues for beneficiaries to submit questions and through different sources, including the pharmacy benefit manager contractor, DHA realized that individual letters describing the upcoming formulary changes required streamlining. The new individual letters describe the upcoming formulary change, lists options for formulary alternatives that the beneficiary and their doctor can consider, includes the associated copay information, and documents the implementation date for the associated change. The letters are mailed to impacted beneficiaries by the pharmacy contractor at least 30 days prior to the formulary change.

In 2018, the NDAA directed TRICARE to add a fourth “not covered” tier to its formulary, which excludes coverage of pharmaceutical agents that have little clinical effectiveness and aren’t cost effective. Similar to commercial pharmacy benefit plans, beneficiaries must pay the full out-of-pocket cost for these completely excluded drugs at retail network pharmacies and these agents aren’t available at military pharmacies or home delivery. The DOD P&T committee not only evaluates drugs for exclusion from coverage, but also identifies branded drugs that may be moved to Tier 1 (generic formulary) status with a lower copayment for beneficiaries. Providers and beneficiaries can refer to the TRICARE Formulary Search Tool for information on tiered copay status and other requirements, including pre-authorization or quantity limits.

To alleviate beneficiary confusion and comments regarding TRICARE Formulary Change Beneficiary letters, the DHA created five letter templates for pre-authorization, step therapy, non-formulary, non-covered and OTC removal changes. All new letters immediately begin with the date of change and impacted drug in bolded font so beneficiaries can easily know the important details up front. In addition, the letter outlines the reason for the formulary change. A separate letter is attached so that beneficiaries can share the information to review with their health care provider. The beneficiaries are also provided with the link to the TRICARE Formulary Search Tool that provides more information on TRICARE covered drugs, including any restrictions and which provides any applicable pre-authorization forms.

In 2019, in addition to mailing letters to beneficiaries 30 days prior to the formulary change implementation date, DHA also published letter templates on the beneficiary website so beneficiaries could access them directly. Posting the letters on the website helps alert beneficiaries of upcoming formulary changes and has also aided in reducing the level of confusion.