Medicaid formularies manage conflicts of interest poorly

Managing conflict of interest (COI) is important when selecting drugs for formularies or reimbursement lists — a listing of drugs that provides wholesale acquisition cost plus a percentage and dispensing fee — to ensure that medications are selected based on evidence and with minimal bias. But a new study that looked at state Medicaid drug selection committees found wide variation in COI policy, with minimal transparency and standardization.

Because Medicaid rolls are expected to increase under health reform, Medicaid formularies need to do a better job managing COI. Researchers at the University of California — San Francisco concluded that there is a need for a model COI policy for formulary committees that can be adapted for individual states.

The researchers report that COI policies were difficult or impossible to find for many states. “Only about half of the policies were readily available on state Web sites, and at least one program stated that its policies were not in the public domain,” write Lisa Bero, PhD, and Nicole Yvonne Nguyen, PharmD, in “Medicaid Drug Selection Committees and Inadequate Management of Conflicts of Interest” in the February issue of JAMA Internal Medicine.

They found that 67 percent of policies use disclosure to manage conflicts. Although disclosing COI is found in most policies, it is inadequate as the sole management strategy. “While disclosure is necessary to identify COI, it does not mitigate the effect of the COI on decision making,” they write.

The second most common (52 percent) management strategy is to require committee members to recuse themselves from matters that pose a COI. In most cases, members who disclosed a COI had to recuse themselves from both voting and discussion.

The researchers obtained policy documents from 27 of the 48 Medicaid programs — 14 from Web sites and 13 by contacting the committees directly. These documents consisted of pharmacy & therapeutics (P&T) operating procedures, P&T bylaws, acknowledgment of review of ethical practices forms, COI statements, and disclosure forms.

The strictness of management strategies varies by state. Twelve programs used intermediate strategies to manage COI; this was some mix of self-recusal and other methods. Only 4 of 27 programs (15 percent) enforced the most restrictive strategy of banning certain relationships with drug manufacturers, and four programs used disclosure alone. The authors report that Colorado and Kansas policies explicitly stated that the existence of such relationships will not “automatically preclude an individual from participating on the committee.”

Managing conflicts of interest in Medicaid programs varies by state
Banned relationship Disclosure and other methods Disclosure alone
Rhode Island
*Management strategies in Idaho and Washington include disclosure and disclosure plus other methods.
Source: Nguyen NY, Bero L. Medicaid drug selection committees and inadequate management of conflicts of interest. 2013; JAMA Intern Med. 173(5):338–343
“Banned relationships” means that all or some industry relationships were prohibited for committee members. Intermediate strategies included self-recusal and other management strategies. “Disclosure alone” refers to policies that only require disclosure statements from committee members.

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