ORGANIZATION: Blue Cross Blue Shield of Vermont. PROBLEM OR ISSUE ADDRESSED: Approval of new prescription products by the Federal Drug Administration dictates that organizations review the medication and consider the drug’s position on the formulary. Pharmacy and Therapeutics Committee members are required to consider many factor. GOALS: Utilize a pharmacoeconomic model to evaluate the impact of pregabalin per member per month (PMPM) costs and incorporate this information into the formulary review process to determine the appropriate formulary status of pregabalin. OUTCOMES ITEMS USED IN THE DECISION: Per member per month (PMPM) costs, and the organization’s drug costs and utilization patterns of selected agents for epilepsy and neuropathic pain were reviewed. IMPLEMENTATION STRATEGY: Drug utilization data for all second generation antiepileptic drugs and medications commonly used to treat neuropathic pain were reviewed. The drug costs per day and the number patients prescribed each drug were collected monthly. Total drug costs and PMPM costs were calculated for each month between September 2005 and November 2006 using Therapy Cost GPS. Therapy Cost GPS is an analytical software tool, developed by Pfizer, Inc. that supports the development of cost models to assess the financial impact of formulary changes before they are established and accurately evaluates their impact once they have been implemented. The results were compared to the same parameters from August 2005, which served as a baseline before pregabalin was available. The available results were included with the pregabalin formulary presentation to the Pharmacy and Therapeutics Committee in April 2006, with the commitment for continual evaluation. RESULTS: A total of 6259 patients received drugs targeted for analysis in August 2005, accounting for $1,829,626 in total drug costs, and a PMPM cost of $1.02. In November 2006 after 15 months, 5825 patients received drugs targeted for analysis, and total drug costs decreased by 7.2% to $1,698,187. The PMPM cost was reduced to $0.94, a reduction independent of patient number. During November 2006 pregabalin prescribing was limited, accounting for approximately 2% utilization of comparator drugs. Mean (+/- SD) monthly values during the 15-month data collection period for number patients, total drug costs and PMPM cost were; 5761 (326), $1,726,090 ($42,008), $0.96 ($0.02), respectively. The data suggests pregabalin usage and PMPM costs are projected to remain stable. Shifting drug utilization patterns and reductions in the cost of generic gabapentin likely accounted for the reduced PMPM cost. Because pregabalin utilization was limited and did not increase the PMPM costs, it was decided to continue the drug’s position as an unrestricted third tier agent, without the need to implement a step edit or prior authorization requirement. LESSONS LEARNED: Because utilization of pregabalin during the first year has been limited, it is unclear if the financial implications will change over time. Ongoing evaluation will be conducted to further assess pregabalin utilization patterns and determine if increased utilization is observed and if formulary adjustments are required. Patient diagnosis was not available so the indication for pregabalin was not included in the review. Other organizations with access to linked pharmacy and medical databases could refine the review process by focusing on drug therapy for a specific indication. The monthly monitoring of drug utilization patterns and costs provides helpful information to evaluate the formulary position of newly available drugs, and allows a concurrent review of existing therapies. Changes in generic drug usage, cost reductions associated with shifts from single source to multi-source generic products, and increased costs of branded products are examples of changes readily observed with an ongoing review process. As a result of this project, cost models will be integrated into the formulary review process as additional new drugs become available. In addition, future plans include using a similar cost model to evaluate established drugs and drug class reviews.