PBM

RULES ENGINES – BUSINESS STRUCTURE LAYOUT

DR. JEHAD AL YOUSEF
 I- PBM - Formulary Management Rules
Formulary management is a crucial aspect of Pharmaceutical Benefit Management
(PBM) that involves developing and maintaining a list of approved medications covered
by a health plan.

The primary goal is to optimize patient care while managing costs.

Formulary management rules ensure that the formulary is applied consistently and
effectively.

1. Drug Coverage Determination

1.1. Inclusion Criteria:
Define criteria for including drugs in the formulary based on efficacy, safety, cost-
effectiveness, and clinical guidelines.

1.2. Exclusions:
Establish rules for excluding certain drugs from the formulary due to lack of
efficacy, safety concerns, or cost issues.

2. Therapeutic Tiering
2.1. Tier Structure:
Organize drugs into different tiers, typically including generic drugs, preferred
brand-name drugs, non-preferred brand-name drugs, and specialty drugs. Each
tier has different cost-sharing requirements.

2.2. Tier Placement Rules:

Determine how drugs are placed into different tiers based on factors like clinical
effectiveness, cost, and availability of therapeutic alternatives.

3. Prior Authorization (PA)

3.1. PA Requirements:
Establish which drugs require prior authorization before being covered. This
typically applies to high-cost medications, drugs with potential for misuse, or those
with significant side effects.

3.2. PA Criteria:
Define specific clinical criteria that must be met for a PA request to be approved,
such as diagnosis, previous treatment failures, or specialist recommendations.

4. Step Therapy
4.1. First-Line Therapy Rules:
Require patients to try lower-cost or safer first-line medications before progressing
to more expensive or riskier second-line therapies.
4.2. Step Therapy Protocols:
Outline specific step therapy protocols for different drug classes or conditions,
ensuring patients follow an evidence-based sequence of treatments.

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5. Quantity Limits
5.1. Daily and Monthly Limits:
Set maximum quantities of medications that can be dispensed per day, month,
or other period to prevent overuse or misuse.

5.2. Dose Optimization:

Ensure that prescribed doses are appropriate for the intended use and adjust
quantities accordingly.

6. Generic Substitution
6.1. Mandatory Substitution:
Require substitution of generic equivalents for brand-name drugs when available
and appropriate.

6.2. Exceptions:
Define circumstances under which brand-name drugs can be dispensed instead
of generics, such as patient intolerance to the generic version.

7. Specialty Drug Management

7.1. Specialty Drug Criteria:
Establish specific rules for managing high-cost specialty drugs, including handling,
storage, and patient monitoring requirements.

7.2. Distribution Channels:

Specify approved distribution channels for specialty drugs, such as specialty
pharmacies or mail-order services.

8. Cost-Sharing Rules
8.1. Co-payment Structures:
Define the co-payment or coinsurance amounts for each formulary tier,
influencing patient out-of-pocket costs.

8.2. Out-of-Pocket Maximums:

Implement caps on the total amount a patient has to pay for medications within
a given time period, such as annually.

9. Clinical Guidelines Integration

9.1. Evidence-Based Decisions:
Ensure formulary decisions are based on the latest clinical guidelines and
evidence, promoting the use of the most effective and safe therapies.

9.2. Guideline Updates:

Regularly update the formulary and associated rules to reflect new clinical
evidence and guidelines.

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10. Drug Utilization Review (DUR) Integration
10.1. Prospective DUR:
Apply DUR rules to ensure formulary adherence at the point of prescription,
checking for formulary status and alternatives.
10.2. Concurrent DUR:
Monitor ongoing therapy to ensure continued adherence to the formulary
and identify any off-formulary use.

10.3. Retrospective DUR:

Analyze prescription patterns retrospectively to ensure formulary
compliance and optimize future formulary decisions.

11. Examples of Formulary Management Rules

11.1. Inclusion and Exclusion Criteria
11.1.1. Rule: Only include drugs with proven efficacy and safety profiles and
exclude those with significant risks or better alternatives.
11.1.2. Example: Excluding a new, expensive drug when an equally effective,
lower-cost option is available.

11.2. Tier Placement

11.2.1. Rule: Place drugs with similar therapeutic effects and costs into the same
tier to promote cost-effective choices.
11.2.2. Example: Generic statins in Tier 1 (lowest co-pay), preferred brand-name
statins in Tier 2, and non-preferred brand-name statins in Tier 3.

11.3. Prior Authorization

11.3.1. Rule: Require prior authorization for biologics and specialty drugs due to
their high cost and potential for misuse.
11.3.2. Example: A biologic for rheumatoid arthritis requires PA to confirm the
diagnosis and failure of first-line treatments.

11.4. Step Therapy

11.4.1. Rule: Implement step therapy for antidepressants, requiring patients to try
generic SSRIs before progressing to brand-name or newer agents.
11.4.2. Example: A patient must try fluoxetine (generic) before escitalopram
(brand-name).

11.5. Quantity Limits

11.5.1. Rule: Limit the quantity of opioids dispensed to a 30-day supply to prevent
overuse and potential addiction.
11.5.2. Example: Limiting opioid prescriptions to 30 pills per month unless a higher
quantity is medically justified.

12. Benefits of Formulary Management Rules

12.1. Cost Control:
Helps manage and control drug spending by promoting the use of cost-effective
medications and therapies.

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12.2. Quality of Care:
Ensures that patients receive clinically effective and safe medications in line with
the latest guidelines.

12.3. Access to Medications:

Balances cost and accessibility, ensuring patients have access to necessary
medications without undue financial burden.

12.4. Patient Safety:

Reduces the risk of adverse effects and interactions by carefully managing drug
selection and usage.

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 II- Pre-Authorization Rules
Prior Authorization (PA) rules are critical in Pharmaceutical Benefit Management (PBM)
for controlling costs, ensuring the appropriate use of medications, and maintaining high
standards of patient care.

These rules require healthcare providers to obtain approval from the PBM before
prescribing certain medications.

1. Criteria for Prior Authorization

1.1. Clinical Justification:
Establish clear clinical criteria that must be met for a drug to be approved. This
includes specific diagnoses, lab results, and other clinical indicators.

1.2. Step Therapy Compliance:

Ensure that less costly or safer alternatives have been tried and failed before
approving the requested medication.

1.3. Specialist Involvement:

In some cases, require that the prescription comes from a specialist in the relevant
field to ensure appropriate use.

2. Documentation Requirements
2.1. Necessary Information:
Define the required documentation that must be submitted for PA approval, such
as patient medical history, treatment plan, and evidence of previous treatments.

2.2. Standardized Forms:

Use standardized PA request forms to streamline the process and ensure all
necessary information is collected.

3. Approval Process and Timelines

3.1. Decision Timelines:
Set specific timelines for making PA decisions to prevent delays in patient care.
For example, urgent requests might require a decision within 24 hours, while non-
urgent requests might allow for a few days.

3.2. Automated Systems:

Implement automated systems for PA processing to increase efficiency and
reduce turnaround times.

4. Review and Appeals Process

4.1. Initial Review:
Ensure that initial PA requests are reviewed by qualified personnel, such as
pharmacists or nurses, with escalation to physicians for complex cases.

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 4.2. Appeals Process:
Establish a clear appeals process for denied PA requests, allowing healthcare
providers to submit additional information or request a secondary review.

5. Medications Subject to Prior Authorization

5.1. High-Cost Drugs:
Apply PA to high-cost medications to ensure they are used appropriately and
only when necessary.

5.2. Specialty Drugs:

Require PA for specialty drugs that may have significant side effects, require
special handling, or have limited use cases.

5.3. New Medications:

Implement PA for newly approved medications until sufficient usage data is
available to determine their appropriate use.

5.4. High-Risk Medications:

Use PA for medications with a high potential for abuse, misuse, or severe side
effects.

6. Clinical Guidelines and Evidence-Based Criteria

6.1. Guideline Alignment:
Ensure PA criteria align with the latest clinical guidelines and evidence-based
practices.

6.2. Continuous Updates:

Regularly update PA criteria to reflect new research, guidelines, and changes in
clinical practice.

7. Patient-Specific Factors
7.1. Individual Considerations:
Allow for exceptions based on individual patient factors such as comorbidities,
previous adverse reactions, and specific health needs.

7.2. Personalized Approvals:

Customize PA requirements for patients with unique or complex medical
conditions.

8. Cost-Benefit Analysis
8.1. Economic Impact:
Consider the cost-effectiveness of the medication in relation to its therapeutic
benefits.
8.2. Alternative Therapies:
Evaluate available alternatives and their relative costs and benefits before
approving more expensive treatments.

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9. Examples of Prior Authorization Rules
9.1. Biologics for Rheumatoid Arthritis
9.1.1. Rule: Require PA to confirm the diagnosis of rheumatoid arthritis and the
failure of conventional DMARDs (Disease-Modifying Antirheumatic Drugs)
before approving biologic agents.
9.1.2. Documentation: Necessary documentation includes medical records
showing the diagnosis, previous treatments, and treatment outcomes.

9.2. Specialty Oncology Medications

9.2.1. Rule: Apply PA to ensure that specialty oncology medications are used
according to specific cancer treatment guidelines and protocols.
9.2.2. Criteria: Criteria include tumor type, stage, previous treatments, and
genetic markers.

9.3. Hepatitis C Medications

9.3.1. Rule: Require PA for hepatitis C medications to confirm the presence of the
virus, the genotype, liver function tests, and previous treatment history.
9.3.2. Approval Process: Approval might depend on liver disease severity and the
presence of comorbid conditions.

9.4. Opioid Prescriptions

9.4.1. Rule: Implement PA for long-term opioid use to verify the necessity based
on chronic pain conditions and ensure alternative pain management
strategies have been attempted.
9.4.2. Safety Checks: Include criteria such as patient history of substance abuse
and concurrent use of other CNS depressants.

10. Challenges and Considerations

10.1. Administrative Burden:
The PA process can be administratively burdensome for healthcare providers,
requiring significant time and resources.

10.2. Delays in Care:

PA requirements can lead to delays in patients receiving necessary medications,
potentially impacting health outcomes.

10.3. Provider and Patient Frustration:

The complexity and perceived barriers of the PA process can lead to frustration
for both providers and patients.

11. Mitigating Challenges

11.1. Streamlining Processes:
Implement electronic prior authorization (e-PA) systems to automate and
streamline the PA process, reducing administrative burdens and decision times.

11.2. Clear Communication:

Ensure clear and transparent communication between PBMs, healthcare
providers, and patients regarding PA requirements and processes.

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 11.3. Education and Support:
Provide education and support to healthcare providers to help them navigate
the PA process efficiently.

12. Benefits of Prior Authorization

12.1. Cost Control:
Helps manage and control drug spending by ensuring that high-cost medications
are used appropriately.

12.2. Optimized Therapy:

Ensures that patients receive the most effective and clinically appropriate
medications based on their specific conditions and health needs.

12.3. Safety:
Reduces the risk of adverse effects by ensuring that medications are prescribed
according to established clinical guidelines and patient safety protocols.

12.4. Preventing Misuse:

Helps prevent the misuse or overuse of medications, particularly those with high
potential for abuse.

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 III- Drug Utilization Review Rules
Drug Utilization Review (DUR) rules are essential in Pharmaceutical Benefit Management
(PBM) to ensure the appropriate, safe, and cost-effective use of medications.

DUR involves evaluating prescription drug use against predefined criteria and guidelines.

1. Prospective DUR
Prospective DUR occurs before the prescription is dispensed, aiming to prevent
potential problems at the point of care.

1.1. Therapeutic Duplication:

Rules that identify if a patient is receiving multiple medications with the same
therapeutic effect, potentially increasing the risk of side effects or overdose.

1.2. Drug-Drug Interactions:

Rules to detect potential interactions between the prescribed medication and
the patient’s current medications, which could cause adverse effects.

1.3. Drug-Allergy Interactions:

Screening for medications that the patient might be allergic to, based on their
medical history.

1.4. Dosage Checks:

Ensuring that the prescribed dose is within the recommended range for the
patient’s age, weight, and medical condition.

1.5. Formulary Compliance:

Checking if the prescribed drug is included in the patient’s insurance formulary
and suggesting alternatives if it’s not.

2. Concurrent DUR
Concurrent DUR involves monitoring drug therapy during treatment to address
any issues that arise while the patient is on the medication.

2.1. Early Refill Monitoring:

Rules that detect attempts to refill a prescription too early, which might indicate
overuse or misuse.

2.2. Therapy Duration Monitoring:

Ensuring that the duration of the medication therapy aligns with clinical
guidelines and identifying cases where therapy may be inappropriately
prolonged or shortened.

2.3. Adherence Monitoring:

Tracking if the patient is following their medication regimen as prescribed and
identifying non-adherence which could impact therapeutic outcomes.

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2.4. Real-time Alerts:
Generating alerts for pharmacists and prescribers about potential issues such as
adverse effects or emerging drug interactions.

3. Retrospective DUR
Retrospective DUR analyzes prescription data after the medication has been
dispensed and used, looking at patterns and trends over time.

3.1. Utilization Patterns:

Identifying patterns of drug use across populations to detect overuse, underuse,
or misuse of medications.

3.2. Outlier Detection:

Highlighting patients or providers prescribing or medication-taking behavior
deviates significantly from established norms or guidelines.

3.3. Outcome Analysis:

Evaluating the outcomes of certain drug therapies to determine their
effectiveness and identify areas for improvement.

3.4. Fraud and Abuse Detection:

Spotting potential fraud or abuse, such as doctor shopping (obtaining
prescriptions from multiple providers) or prescription forgery.

4. Specific DUR Rules and Examples

4.1. Therapeutic Duplication
4.1.1. Rule: Identify prescriptions for medications with similar pharmacologic effects.
4.1.2. Example: A patient prescribed two different benzodiazepines concurrently.

4.2. Drug-Drug Interactions

4.2.1. Rule: Detect combinations of drugs that interact negatively.
4.2.2. Example: Prescribing warfarin (an anticoagulant) along with NSAIDs, which
can increase the risk of bleeding.

4.3. Drug-Allergy Conflicts

4.3.1. Rule: Check prescriptions against the patient’s documented allergies.
4.3.2. Example: A patient with a known penicillin allergy was prescribed amoxicillin.

4.4. Appropriate Dosage

4.4.1. Rule: Ensure the prescribed dosage is appropriate for the patient's
demographics and condition.
4.4.2. Example: A pediatric patient prescribed an adult dosage of medication,
risking overdose.

4.5. Formulary Adherence

4.5.1. Rule: Ensure the prescribed drug is on the patient’s formulary.

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4.5.2. Example: Suggesting a covered generic alternative when a non-formulary
brand name drug is prescribed.

4.6. Therapy Duration

4.6.1. Rule: Monitor the length of therapy to ensure it aligns with guidelines.
4.6.2. Example: A patient using antibiotics for a longer period than recommended,
which can lead to resistance.

4.7. Early Refill

4.7.1. Rule: Flag attempts to refill a prescription before the previous supply should
have been exhausted.
4.7.2. Example: A patient requesting a refill for pain medication too soon, indicating
potential abuse.

5. Benefits of DUR
5.1. Enhanced Patient Safety:
By identifying potential adverse effects and interactions, DUR improves
overall patient safety.

5.2. Cost Containment:

Ensures that medications are used appropriately, which helps in controlling
unnecessary healthcare costs.

5.3. Quality of Care:

Promotes the use of evidence-based treatments and best practices in
medication therapy.

5.4. Compliance and Fraud Prevention:

Helps in detecting and preventing non-compliance, fraud, and abuse in
medication use.

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 IV – Quantity Limits Rules
Quantity limits are a critical component of formulary management in Pharmaceutical
Benefit Management (PBM). They help ensure the appropriate use of medications,
prevent overuse or misuse, and control healthcare costs.

1. Purpose of Quantity Limits

1.1. Prevent Overuse and Misuse:
By setting limits on the amount of medication dispensed, PBMs can prevent
potential abuse, overuse, or misuse of certain drugs.

1.2. Ensure Safety:

Quantity limits can reduce the risk of adverse effects by preventing excessive
dosing or prolonged use of medications.

1.3. Cost Management:

Limiting the quantity of expensive medications helps control costs and manage
healthcare resources effectively.

1.4. Adherence to Guidelines:

Ensures that prescriptions align with clinical guidelines and evidence-based
practices, promoting optimal treatment outcomes.

2. Types of Quantity Limits

2.1. Daily Dose Limits
2.1.1. Definition:
Restrict the maximum amount of medication that can be taken in a single
day.
2.1.2. Example:
Limiting the number of opioid tablets to a specific number per day to prevent
overdose and addiction.

2.2. Monthly Limits

2.2.1. Definition:
Set a cap on the total quantity of medication that can be dispensed within
a 30-day period.

2.2.2. Example:
Allowing only a 30-day supply of cholesterol-lowering medication per fill to
ensure regular patient monitoring and compliance.

2.3. Lifetime Limits

2.3.1. Definition:
Impose a total cap on the amount of medication that can be dispensed over
a patient’s lifetime.

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 2.3.2. Example:
Limiting the lifetime use of certain chemotherapeutic agents to prevent
cumulative toxicity.

2.4. Cycle Limits

2.4.1. Definition:
Apply to medications prescribed for cyclic use, restricting the amount
dispensed per cycle.

2.4.2. Example:
For contraceptives, limiting the dispense amount to one cycle per month.

3. Criteria for Establishing Quantity Limits

3.1. Clinical Guidelines:
Quantity limits are often based on clinical guidelines that recommend
appropriate dosing and duration of therapy.
3.2. Safety Profiles:
Medications with higher risks of side effects, dependency, or abuse may have
stricter quantity limits.

3.3. Therapeutic Use:

Consider the therapeutic use of medication, such as acute versus chronic
treatment, to determine appropriate limits.

3.4. Patient Population:

Specific limits may vary based on patient demographics, such as pediatric versus
adult patients, or those with specific comorbidities.

4. Implementing Quantity Limits

4.1. Evidence-Based Criteria
4.1.1. Use clinical research and guidelines to set evidence-based quantity limits
for medications.

4.1.2. Example:
Limiting the prescription of antibiotics to a 10-day supply for common
infections based on clinical evidence.

4.2. Dynamic Adjustments

4.2.1. Adjust quantity limits dynamically based on emerging clinical evidence,
new guidelines, or changes in medication usage patterns.

4.2.2. Example:
Revising opioid prescription limits in response to new data on addiction and
overdose risks.

4.3. Exceptions and Overrides

4.3.1. Implement a process for exceptions or overrides where necessary, based
on individual patient needs and clinical justification.

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 4.3.2. Example:
Allowing additional quantities of pain medication for patients with terminal
cancer under close supervision.

4.4. Monitoring and Review

4.4.1. Regularly review and monitor the effectiveness and appropriateness of
quantity limits through data analysis and patient outcomes.

4.4.2. Example:
Analyzing prescription refill data to identify patterns of overuse or non-
compliance with quantity limits.

5. Examples of Quantity Limit Rules

5.1. Opioids
5.1.1. Rule:
Limit the initial prescription of opioids to a 7-day supply for acute pain to
reduce the risk of addiction and overdose.

5.1.2. Rationale:
Aligns with guidelines from the Centers for Disease Control and Prevention
(CDC) to prevent opioid misuse.

5.2. Antibiotics
5.2.1. Rule:
Restrict antibiotics to a specific course duration based on the type of
infection (e.g., 7 days for urinary tract infections).

5.2.2. Rationale:
Ensures appropriate use and helps prevent antibiotic resistance.

5.3. Antipsychotics
5.3.1. Rule:
Set limits on the monthly quantity of antipsychotic medications to prevent
overuse and manage side effects.

5.3.2. Rationale:
Aligns with guidelines for the safe and effective use of antipsychotic drugs in
treating psychiatric disorders.

5.4. Inhalers
5.4.1. Rule:
Limit the number of inhalers dispensed per month to ensure proper use and
prevent stockpiling.

5.4.2. Rationale:
Encourages patients to follow prescribed usage patterns and seek medical
advice if more frequent use is needed.

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6. Challenges and Considerations
6.1. Patient Access:
Ensure quantity limits do not unduly restrict access to necessary medications,
particularly for patients with chronic conditions.

6.2. Provider Burden:

Minimize the administrative burden on healthcare providers by streamlining the
process for exceptions and overrides.

6.3. Patient Education:

Educate patients on the reasons for quantity limits and the importance of
adhering to prescribed therapies.

6.4. Flexibility:
Maintain flexibility to adjust quantity limits based on individual patient needs and
emerging clinical evidence.

7. Mitigating Challenges
7.1. Electronic Health Records (EHR) Integration:
Use EHR systems to facilitate easy implementation and monitoring of quantity
limits.

7.2. Provider Communication:

Foster clear communication channels between PBMs, healthcare providers, and
patients regarding quantity limit policies.

7.3. Continuous Improvement: Regularly assess and update quantity limit rules based
on feedback from providers, patients, and clinical outcomes.

8. Benefits of Quantity Limits

8.1. Enhances Patient Safety:
Reduces the risk of adverse drug reactions and medication errors.

8.2. Promotes Appropriate Use:

Ensures medications are used as intended, improving therapeutic outcomes.

8.3. Cost-Effective:
Helps manage drug costs by preventing unnecessary or excessive medication
use.

8.4. Supports Clinical Guidelines:

Ensures prescribing practices align with the latest clinical guidelines and best
practices.

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 V – Step Therapy Rules
Step therapy rules, also known as "fail-first" protocols, are a key component of
Pharmaceutical Benefit Management (PBM) that help manage medication use, ensure
cost-effectiveness, and promote the use of clinically appropriate therapies.

These rules require patients to try one or more specified first-line medications (typically
lower-cost or safer alternatives) before "stepping up" to more expensive or riskier second-
line treatments.

1. Benefits of Quantity Limits

1.1. Enhances Patient Safety:
Reduces the risk of adverse drug reactions and medication errors.

1.2. Promotes Appropriate Use:

Ensures medications are used as intended, improving therapeutic outcomes.

1.3. Cost-Effective:
Helps manage drug costs by preventing unnecessary or excessive medication use.

1.4. Supports Clinical Guidelines:

Ensures prescribing practices align with the latest clinical guidelines and best
practices.

2. Components of Step Therapy Rules

2.1. First-Line Therapy Requirements
2.1.1. Criteria:
Define specific first-line medications that must be tried and the conditions
under which they should be used.

2.1.2. Duration:
Specify the duration for which the first-line therapy should be tried before
considering step-up options (e.g., a 30-day trial period).

2.1.3. Documentation:
Require documentation of treatment attempts, including dosage, duration,
and patient response.

2.2. Second-Line Therapy Eligibility

2.2.1. Failure or Inadequate Response:
Define what constitutes treatment failure or inadequate response to first-line
therapy, such as lack of symptom improvement or adverse effects.

2.2.2. Special Considerations:

Include provisions for exceptions, such as patient-specific contraindications
or intolerance to first-line medications.

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 2.2.3. Specialist Input:
In some cases, require specialist evaluation or recommendations before
proceeding to second-line treatments.

2.3. Clinical Guidelines Integration

2.3.1. Evidence-Based Protocols:
Base step therapy rules on established clinical guidelines and evidence-
based practices.

2.3.2. Regular Updates:

Ensure step therapy protocols are regularly reviewed and updated in
response to new clinical evidence and guidelines.

3. Communication and Education

3.1. Provider Notification:
Inform healthcare providers of step therapy requirements and provide clear
instructions on the documentation needed for step-up requests.

3.2. Patient Education:

Educate patients about the rationale behind step therapy and the importance
of adhering to prescribed treatment protocols.

4. Examples of Step Therapy Rules

4.1. Antihypertensive Medications
4.1.1. Rule: Require patients to try generic ACE inhibitors or ARBs as first-line
therapy before prescribing newer, more expensive options like ARNI
(angiotensin receptor-neprilysin inhibitors).
4.1.2. Criteria: Documented lack of blood pressure control or adverse effects with
first-line medications.

4.2. Antidepressants
4.2.1. Rule: Mandate a trial of generic SSRIs (e.g., fluoxetine, sertraline) before
allowing the use of brand-name or newer antidepressants such as SNRIs or
atypical antidepressants.
4.2.2. Criteria: Evidence of inadequate response or intolerance to at least one
SSRI.

4.3. Nonsteroidal Anti-Inflammatory Drugs (NSAIDs)

4.3.1. Rule: Require the use of generic NSAIDs (e.g., ibuprofen, naproxen) before
considering COX-2 inhibitors or other brand-name anti-inflammatory drugs.
4.3.2. Criteria: Documentation of gastrointestinal issues or lack of symptom relief
with generic NSAIDs.

4.4. Biologic Therapies for Rheumatoid Arthritis

4.4.1. Rule: Patients must try and fail conventional DMARDs (Disease-Modifying
Antirheumatic Drugs) like methotrexate before progressing to biologic
DMARDs.

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 4.4.2. Criteria: Documented disease activity despite appropriate DMARD
therapy.

4. Challenges and Considerations

4.1. Administrative Burden:
Step therapy can increase administrative tasks for healthcare providers who must
document treatment failures and submit requests for exceptions.
4.2. Delays in Treatment:
Patients may experience delays in accessing the most effective treatment if initial
therapies are ineffective.

4.3. Patient and Provider Frustration:

The requirement to follow step therapy protocols can be frustrating for both
patients and providers, particularly if they believe a higher-tier medication is more
appropriate from the outset.

4.4. Individual Variability: Patients respond differently to medications, and step

therapy protocols may not account for individual patient needs and
circumstances.

5. Mitigating Challenges
5.1. Streamlining Processes
5.1.1. Implement electronic systems for step therapy management to streamline
documentation and approval processes, reducing administrative burdens.
5.1.2. Use integrated EHR systems to automatically flag step therapy requirements
and track treatment history.

5.2. Providing Clear Guidelines

5.2.1. Offer detailed, clear guidelines and support to healthcare providers to
ensure they understand step therapy rules and how to navigate exceptions.
5.2.2. Develop comprehensive educational materials for patients to help them
understand the rationale behind step therapy and the steps involved.

5.3. Allowing Flexibility

5.3.1. Include provisions for exceptions and overrides based on individual patient
needs, allowing for timely access to appropriate medications.
5.3.2. Ensure a swift and transparent appeals process for cases where first-line
therapies are not suitable.

5.4. Regular Review and Adjustment

5.4.1. Regularly review and update step therapy protocols based on new clinical
evidence, provider feedback, and patient outcomes.
5.4.2. Engage with stakeholders, including healthcare providers, patients, and
advocacy groups, to assess the impact of step therapy rules and make
necessary adjustments.

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6. Implementing Step Therapy Rules
6.1. Developing Protocols
6.1.1. Collaborate with clinical experts to develop evidence-based step therapy
protocols that align with current guidelines and best practices.
6.1.2. Identify medications and conditions where step therapy can be effectively
applied without compromising patient care.

6.2. Educating Stakeholders

6.2.1. Train healthcare providers on step therapy rules, documentation
requirements, and the process for requesting exceptions.
6.2.2. Inform patients about step therapy, emphasizing the importance of
following the prescribed treatment sequence for optimal outcomes.

6.3. Monitoring and Evaluation

6.3.1. Continuously monitor the implementation of step therapy rules to ensure
compliance and assess their impact on patient care and cost savings.
6.3.2. Collect and analyze data on treatment outcomes, patient satisfaction,
and cost-effectiveness to inform future adjustments to step therapy protocols.

7. Benefits of Step Therapy Rules

7.1. Cost Savings:
Reduces healthcare costs by promoting the use of lower-cost, effective
medications before more expensive alternatives.

7.2. Enhanced Safety:

Ensures patients are initially treated with medications that have well-known safety
profiles, reducing the risk of adverse effects.

7.3. Improved Outcomes:

Encourages adherence to evidence-based treatment protocols, leading to
better management of conditions and improved patient outcomes.

7.4. Resource Optimization:

Helps allocate healthcare resources more efficiently, ensuring that high-cost
treatments are reserved for patients who truly need them.

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 VI – Cost Sharing and Co-Payment Rules

Cost sharing and co-payment rules are essential components of Pharmaceutical Benefit
Management (PBM) strategies designed to manage healthcare costs, promote
appropriate medication use, and ensure that patients have access to necessary
treatments.

These rules define how costs are divided between the insurer and the patient, impacting
both patient behavior and overall healthcare spending.

1. Purpose of Cost Sharing and Co-Payment Rules

1.1. Cost Management:
Help manage and control drug spending by sharing the cost of medications
between insurers and patients.

1.2. Promoting Cost-Effective Choices:

Encourage patients to choose more cost-effective medications, such as generics,
through differential co-payment structures.

1.3. Utilization Control:

Discourage unnecessary or inappropriate use of medications by making patients
partially responsible for the cost.

1.4. Access to Care:

Ensure that patients have access to necessary medications while balancing
affordability and sustainability of the health plan.

2. Types of Cost Sharing and Co-Payment Structures

2.1. Flat Co-Payment
2.1.1. Definition: Patients pay a fixed amount for each prescription, regardless of
the medication cost.
2.1.2. Example: SAR 10 for generics, SAR 20 for preferred brand-name drugs, and
SAR 40 for non-preferred brand-name drugs.

2.2. Percentage Co-Insurance

2.2.1. Definition: Patients pay a percentage of the medication cost.
2.2.2. Example: 20% of the cost of preferred brand-name drugs, 40% for non-
preferred brand-name drugs.

2.3. Tiered Co-Payments

2.3.1. Definition: Different co-payment amounts are assigned to different tiers of
medications based on factors such as cost, efficacy, and formulary status.
2.3.2. Example: SAR 5 for Tier 1 (generic drugs), SAR 25 for Tier 2 (preferred brand-
name drugs), and SAR 50 for Tier 3 (non-preferred brand-name drugs).

Page 20 of 43
 2.4. Deductibles
2.4.1. Definition: Patients must pay a certain amount out-of-pocket before
insurance coverage begins.
2.4.2. Example: A SAR 100 deductible that must be met before the health plan
starts to cover medication costs.

2.5. Maximum Out-of-Pocket Limits

2.5.1. Definition: A cap on the total amount a patient must pay for medications
within a certain period, after which the insurer covers 100% of the costs.
2.5.2. Example: A SAR 2,000 annual out-of-pocket maximum for all medications.

3. Components of Cost Sharing and Co-Payment Rules

3.1. Formulary Design
3.1.1. Tier Placement:
Medications are placed into tiers based on factors like cost, efficacy, and
availability of therapeutic alternatives. Lower tiers generally have lower co-
payments.

3.1.2. Formulary Updates:

Regular updates to the formulary ensure it reflects current clinical guidelines
and cost-effectiveness data.

3.2. Cost-Sharing Strategies

3.2.1. Encouraging Generics:
Lower co-payments for generic medications to incentivize their use over
brand-name counterparts.

3.2.2. Preferred Drug Lists:

Lower co-payments for drugs on the preferred list, which are typically chosen
based on efficacy and cost-effectiveness.

3.2.3. Specialty Medications:

Higher co-payments or co-insurance for specialty medications due to their
higher costs and complex handling requirements.

3.3. Co-Payment Assistance Programs

3.3.1. Manufacturer Coupons:
Allow patients to use manufacturer coupons or discount cards to reduce out-
of-pocket costs.

3.3.2. Patient Assistance Programs:

Provide financial assistance to patients who cannot afford their medications.

3.4. Patient Education

3.4.1. Transparency:
Clear communication about cost-sharing structures, co-payment amounts,
and the rationale behind them.

Page 21 of 43
 3.4.2. Support Resources:
Offering resources such as pharmacist consultations and medication
counseling to help patients manage their medication costs.

4. Examples of Cost Sharing and Co-Payment Rules

4.1. Chronic Disease Management
4.1.1. Rule: Lower co-payments for chronic disease medications (e.g., diabetes,
hypertension) to promote adherence and prevent complications.
4.1.2. Example: SAR 5 co-payment for insulin and hypertension medications,
versus SAR 25 for other medications.

4.2. Preventive Medications

4.2.1. Rule: Waive co-payments for preventive medications to encourage their
use and improve long-term health outcomes.
4.2.2. Example: SAR 0 co-payment for statins, contraceptives, and vaccines.

4.3. High-Cost Specialty Medications

4.3.1. Rule: Implement higher co-insurance rates for specialty medications to
share the cost burden between the insurer and the patient.
4.3.2. Example: 30% co-insurance for biologics used to treat rheumatoid arthritis.

4.4. Generic Drug Promotion

4.4.1. Rule: Significantly lower co-payments for generics to drive their use over
more expensive brand-name drugs.
4.4.2. Example: SAR 5 for generic antibiotics versus SAR 30 for brand-name
antibiotics.

5. Benefits of Cost Sharing and Co-Payment Rules

5.1. Cost Control:
Helps manage healthcare spending by sharing costs and encouraging the use of
cost-effective medications.

5.2. Behavioral Incentives:

Influences patient behavior towards choosing lower-cost and clinically
appropriate medications.

5.3. Sustainability:
Ensures the financial sustainability of health plans by balancing patient access
with cost containment.

5.4. Access and Adherence:

When structured appropriately, can improve medication adherence and health
outcomes by reducing financial barriers to essential medications.

6. Challenges and Considerations

6.1. Affordability:
High co-payments or co-insurance can create financial barriers, leading to non-
adherence or medication abandonment.

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 6.2. Complexity:
Multiple tiers and varying co-payment amounts can be confusing for patients,
requiring clear communication and support.

6.3. Equity:
Ensure that cost-sharing structures do not disproportionately impact low-income
or vulnerable populations.

6.4. Balancing Act:

Finding the right balance between cost control and access to necessary
medications is critical.

7. Mitigating Challenges
7.1. Simplified Structures
7.1.1. Simplify co-payment structures to make them easier for patients to
understand and navigate.
7.1.2. Use clear, consistent communication to explain the cost-sharing rules and
their benefits.

7.2. Financial Assistance

7.2.1. Provide financial assistance programs for patients who cannot afford their
medications, such as sliding scale co-payments based on income.
7.2.2. Collaborate with manufacturers and non-profits to offer co-payment
assistance and subsidies.

7.3. Regular Review and Adjustment

7.3.1. Continuously review and adjust cost-sharing rules based on patient
feedback, utilization data, and healthcare outcomes.
7.3.2. Ensure that cost-sharing policies remain aligned with the latest clinical
guidelines and economic conditions.

7.4. Enhanced Transparency

7.4.1. Maintain transparency in cost-sharing policies, providing patients with
detailed information about their medication costs and the rationale behind
cost-sharing decisions.
7.4.2. Use tools like online portals or apps to help patients track their out-of-pocket
spending and understand their benefits.

Page 23 of 43
 VII – Benefit Design Rules
Benefit design rules are foundational elements in Pharmaceutical Benefit Management
(PBM) that determine how prescription drug benefits are structured and administered.

These rules guide the development of drug formularies, co-payment and co-insurance
structures, prior authorization requirements, and other aspects of prescription drug
coverage.

Effective benefit design aims to optimize medication use, control costs, and ensure
patient access to necessary medications.

1. Purpose of Benefit Design Rules

1.1. Cost Management:
Control and reduce overall healthcare costs by promoting the use of cost-
effective medications and preventing waste.

1.2. Improving Health Outcomes:

Ensure patients have access to essential medications that improve health
outcomes and manage chronic conditions effectively.

1.3. Ensuring Access and Equity:

Design benefits to provide equitable access to medications across different patient
populations.

1.4. Promoting Adherence:

Encourage medication adherence through affordable co-payment structures
and access to necessary therapies.

2. Components of Benefit Design Rules

2.1. Formulary Management
2.1.1. Drug Tiers: Categorize medications into tiers (e.g., generic, preferred brand,
non-preferred brand, specialty drugs) with different co-payment levels to
incentivize cost-effective choices.
2.1.2. Regular Updates: Ensure the formulary is regularly reviewed and updated
based on clinical guidelines, new drug approvals, and emerging evidence
on drug efficacy and safety.

2.2. Cost Sharing Structures

2.2.1. Co-Payments and Co-Insurance: Define the patient’s share of the
medication cost, with structures varying by drug tier and therapeutic
category.
2.2.2. Deductibles and Out-of-Pocket Maximums: Set annual deductibles and
out-of-pocket maximums to limit the financial burden on patients.

Page 24 of 43
 2.3. Prior Authorization and Utilization Management
2.3.1. Prior Authorization (PA): Require approval before certain medications can
be dispensed to ensure their appropriate use based on clinical criteria.
2.3.2. Step Therapy: Implement step therapy protocols requiring patients to try
first-line, cost-effective medications before advancing to more expensive
options.

2.4. Quantity Limits

2.4.1. Daily and Monthly Limits: Set limits on the amount of medication dispensed
per day or month to prevent overuse and misuse.
2.4.2. Cycle Limits: Apply to medications prescribed for cyclic use, ensuring they
are dispensed in appropriate quantities.

2.5. Specialty Drug Management

2.5.1. Specialty Pharmacy Networks: Use specialty pharmacies to manage the
distribution and administration of high-cost specialty medications, often
requiring special handling or monitoring.
2.5.2. Patient Support Programs: Provide additional support for patients using
specialty medications, including case management and financial
assistance.

2.6. Medication Adherence Programs

2.6.1. Medication Therapy Management (MTM): Offer MTM services to help
patients manage their medications, particularly those with multiple chronic
conditions.
2.6.2. Adherence Incentives: Implement incentives such as reduced co-
payments for patients who adhere to their prescribed medication regimens.

3. Examples of Benefit Design Rules

3.1. Generic Drug Promotion
3.1.1. Rule: Lower co-payments for generic medications to encourage their use
over brand-name drugs.
3.1.2. Example: SAR 5 co-payment for generic drugs, SAR 30 for preferred brand-
name drugs, and SAR 50 for non-preferred brand-name drugs.

3.2. Chronic Disease Management

3.2.1. Rule: Provide comprehensive coverage for medications treating chronic
diseases with minimal cost sharing to improve adherence and outcomes.
3.2.2. Example: No co-payment for essential medications like insulin or
hypertension drugs for patients with chronic conditions.

3.3. Preventive Drug Coverage

3.3.1. Rule: Waive co-payments for preventive medications to encourage their
use and reduce long-term healthcare costs.
3.3.2. Example: SAR 0 co-payment for preventive medications such as statins,
contraceptives, and vaccines.

Page 25 of 43
 3.4. High-Cost Specialty Medications
3.4.1. Rule: Implement co-insurance for specialty medications to share the cost
burden while providing access through specialty pharmacies.
3.4.2. Example: 20% co-insurance for specialty medications with an annual out-
of-pocket maximum to cap patient expenses.

4. Benefits of Benefit Design Rules

4.1. Cost Control:
Helps manage and reduce overall drug spending by promoting the use of cost-
effective medications and controlling the use of high-cost therapies.

4.2. Improved Health Outcomes:

Ensures patients have access to essential medications, which helps manage
chronic conditions and improve overall health outcomes.

4.3. Promoted Adherence:

Reduces financial barriers to medication adherence, leading to better health
outcomes and reduced long-term healthcare costs.

4.4. Resource Optimization:

Allocates healthcare resources efficiently, ensuring that high-cost treatments are
used appropriately, and cost-effective therapies are prioritized.

5. Challenges and Considerations

5.1. Balancing Cost and Access:
Ensuring that cost control measures do not unduly restrict access to necessary
medications, particularly for vulnerable populations.

5.2. Patient and Provider Burden:

Minimizing the administrative burden on healthcare providers and patients,
especially with prior authorization and step therapy requirements.

5.3. Equity Concerns:

Designing benefit structures that do not disproportionately impact low-income or
vulnerable patients.

5.4. Dynamic Market:

Continuously adapting benefit designs to keep pace with new drug approvals,
changes in clinical guidelines, and market dynamics.

6. Mitigating Challenges
6.1. Stakeholder Engagement
6.1.1. Provider and Patient Feedback:
Engage healthcare providers and patients in the design and evaluation of
benefit structures to ensure they are practical and meet patient needs.

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 6.1.2. Collaboration:
Work with pharmaceutical companies, patient advocacy groups, and
healthcare providers to design benefit structures that balance cost control
with patient access.

6.2. Technology Integration

6.2.1. EHR and PBM Systems:
Integrate electronic health records (EHR) with PBM systems to streamline prior
authorization and step therapy processes.

6.2.2. Real-Time Benefit Tools:

Implement tools that provide real-time information on medication costs and
coverage to both providers and patients.

6.3. Clear Communication

6.3.1. Transparency:
Clearly communicate benefit design rules, co-payment structures, and prior
authorization requirements to patients and providers.

6.3.2. Education:
Provide educational resources to help patients understand their benefits and
navigate the healthcare system.

6.4. Continuous Improvement

6.4.1. Data Analytics:
Use data analytics to monitor the impact of benefit design rules on
medication utilization, patient outcomes, and costs.

6.4.2. Regular Review:

Continuously review and adjust benefit designs based on emerging
evidence, patient needs, and healthcare market changes.

Page 27 of 43
 VIII - Clinical Protocols and Guidelines Rules
Clinical protocols and guidelines are essential elements in Pharmaceutical Benefit
Management (PBM) that help ensure the safe, effective, and appropriate use of
medications.

These rules are based on evidence-based clinical guidelines and protocols, which are
developed by medical experts and organizations to standardize treatment and improve
patient outcomes.

1. Purpose of Clinical Protocols and Guidelines Rules

1.1. Standardization of Care:
Ensure consistent application of evidence-based practices across different
healthcare providers and settings.

1.2. Improved Patient Outcomes:

Enhance the quality of care and patient outcomes by following best practices
and scientifically validated treatment approaches.

1.3. Cost Management:

Reduce unnecessary or inappropriate medication use, thereby managing overall
healthcare costs.

1.4. Safety and Efficacy:

Promote the use of medications with established safety and efficacy profiles,
minimizing the risk of adverse effects and treatment failures.

2. Components of Clinical Protocols and Guidelines Rules

2.1. Evidence-Based Guidelines
2.1.1. Development:
Formulated based on systematic reviews of clinical evidence, expert
consensus, and best practices.

2.1.2. Sources:
Derived from authoritative bodies such as the Saudi MoH, SFDA, CHI, NPHIES,
and specialty-specific organizations.

2.2. Implementation and Adherence

2.2.1. Integration:
Incorporated into electronic health records (EHRs) and clinical decision
support systems to facilitate adherence by healthcare providers.

2.2.2. Education:
Ongoing education and training for healthcare providers to ensure
understanding and compliance with current guidelines.

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 2.3. Therapeutic Pathways
2.3.1. Step Therapy:
Sequential use of therapies starting with the most cost-effective and safest
options before progressing to more expensive or riskier alternatives.

2.3.2. Treatment Algorithms:

Defined algorithms for managing specific conditions, guiding the selection of
appropriate medications and treatment steps.

2.4. Prior Authorization Criteria

2.4.1. Clinical Justification:
Require clinical justification based on guidelines for the use of certain high-
cost or high-risk medications.

2.4.2. Review Process:

Establish a review process to evaluate and approve requests for medications
requiring prior authorization.

2.5. Monitoring and Feedback

2.5.1. Outcomes Tracking:
Monitor patient outcomes to assess their effectiveness and adherence to
clinical protocols.

2.5.2. Continuous Improvement:

Regularly update guidelines and protocols based on new clinical evidence
and feedback from healthcare providers and patients.

3. Examples of Clinical Protocols and Guidelines Rules

3.1. Chronic Disease Management
3.1.1. Rule: Adhere to specific guidelines for managing chronic conditions like
diabetes, hypertension, and asthma.
3.1.2. Example: Use of SDEA (Saudi Diabetes and Endocrine Association)
guidelines for diabetes management, including HbA1c targets and
medication choices.

3.2. Antibiotic Stewardship

3.2.1. Rule: Follow protocols to minimize antibiotic resistance by using antibiotics
appropriately.
3.2.2. Example: Adherence to CDC (Centers for Disease Control and Prevention)
guidelines for prescribing antibiotics for respiratory infections.

3.3. Cancer Treatment Protocols

3.3.1. Rule: Use evidence-based oncology treatment guidelines to select
appropriate chemotherapy and targeted therapy regimens.
3.3.2. Example: Implementation of SOS (Saudi Oncology Society) guidelines for
the treatment of various cancers.

Page 29 of 43
 3.4. Cardiovascular Disease Management
3.4.1. Rule: Apply guidelines for the use of medications in managing conditions
like hyperlipidemia and heart failure.
3.4.2. Example: Following SHA (Saudi Heart Association) guidelines for cholesterol
management, including statin therapy.

4. Benefits of Clinical Protocols and Guidelines Rules

4.1. Quality of Care:
Enhance the quality of patient care by ensuring treatments are based on the
latest clinical evidence.

4.2. Consistency:
Provide a consistent approach to treatment across different healthcare providers
and settings.

4.3. Patient Safety:

Reduce the risk of adverse events and improve medication safety by promoting
the use of validated treatments.

4.4. Cost Efficiency:

Control costs by preventing unnecessary treatments and focusing on cost-
effective therapies.

4.5. Regulatory Compliance:

Ensure compliance with regulatory requirements and standards of care.

5. Challenges and Considerations

5.1. Implementation Variability:
Differences in how guidelines are implemented across providers and settings.

5.2. Keeping Up to Date:

The need for continuous updating of guidelines to reflect the latest evidence and
clinical practices.

5.3. Provider Resistance:

Potential resistance from healthcare providers due to perceived limitations on
clinical autonomy.

5.4. Patient Variability:

Guidelines may not always account for individual patient variability and
preferences.

6. Mitigating Challenges
6.1. Enhanced Integration
6.1.1. Technology: Utilize advanced EHR systems and clinical decision support
tools to integrate guidelines seamlessly into clinical workflows.
6.1.2. Automation: Automate the application of guidelines through alerts and
reminders in EHR systems.

Page 30 of 43
6.2. Provider Engagement
6.2.1. Training and Education: Provide ongoing education and training for
healthcare providers on the importance and application of clinical
guidelines.
6.2.2. Feedback Mechanisms: Establish feedback loops where providers can
share their experiences and challenges with guideline implementation.

6.3. Patient-Centric Approaches

6.3.1. Individualization: Allow for individual patient considerations and
preferences within the framework of evidence-based guidelines.
6.3.2. Shared Decision-Making: Encourage shared decision-making between
patients and providers to align treatment plans with patient values and
preferences.

6.4. Continuous Improvement

6.4.1. Regular Updates: Ensure guidelines are regularly reviewed and updated
based on new evidence and clinical practices.
6.4.2. Stakeholder Involvement: Involve a broad range of stakeholders, including
clinicians, researchers, and patients, in the guideline development and
review process.

Page 31 of 43
 IX – Network Pharmacy Rules
Network pharmacy rules are critical components of Pharmaceutical Benefit
Management (PBM) strategies.

These rules define how PBMs manage relationships with pharmacies, establish
reimbursement rates, and ensure that patients have access to medications through a
network of participating pharmacies.

1. Purpose of Network Pharmacy Rules

1.1. Cost Control:
Manage and reduce drug spending through negotiated rates and efficient
pharmacy network management.

1.2. Access to Medications:

Ensure patients have convenient access to medications through a
comprehensive network of pharmacies.

1.3. Quality of Service:

Maintain high standards of pharmacy services and ensure compliance with
regulatory requirements.

1.4. Medication Adherence:

Support medication adherence by facilitating easy access to prescriptions and
providing additional services like medication counseling.

2. Components of Network Pharmacy Rules

2.1. Pharmacy Contracting
2.1.1. Negotiated Rates:
Establish reimbursement rates for medications and pharmacy services
through contracts with network pharmacies.

2.1.2. Preferred and Non-Preferred Networks:

Create different tiers of pharmacy networks, such as preferred, non-
preferred, and specialty networks, with varying cost structures and incentives.

2.2. Pharmacy Accreditation and Standards

2.2.1. Accreditation Requirements:
Set standards for network pharmacies, including accreditation by recognized
bodies to ensure quality and compliance.

2.2.2. Performance Metrics:

Monitor and evaluate pharmacy performance based on metrics like
dispensing accuracy, patient satisfaction, and adherence support.

Page 32 of 43
 2.3. Formulary Management
2.3.1. In-Network Formulary Compliance:
Ensure that network pharmacies dispense medications according to the
PBM’s formulary, which includes preferred and covered medications.

2.3.2. Generic Substitution:

Promote or mandate the dispensing of generic medications when
appropriate to control costs and maintain formulary compliance.

2.4. Reimbursement and Payment Models

2.4.1. Fee-for-Service vs. Value-Based Payments:
Utilize different payment models, such as traditional fee-for-service or value-
based payment structures, to incentivize high-quality care and cost-
efficiency.

2.4.2. Incentive Programs:

Implement incentive programs to reward pharmacies for achieving certain
performance metrics, such as high rates of medication adherence or patient
satisfaction.

2.5. Patient Access and Convenience

2.5.1. Network Adequacy:
Ensure an adequate number of in-network pharmacies to provide
convenient access for patients, considering factors like geographic
distribution and hours of operation.

2.5.2. Mail Order and Specialty Pharmacies:

Include mail-order pharmacies and specialty pharmacies in the network to
provide additional options for patients, especially those requiring chronic or
specialty medications.

2.6. Pharmacy Services

2.6.1. Medication Therapy Management (MTM):
Require or encourage pharmacies to offer MTM services to help patients
manage their medications, especially those with chronic conditions or
multiple medications.

2.6.2. Adherence Programs:

Support pharmacy-led programs aimed at improving medication
adherence, such as refill reminders, synchronization services, and patient
education.

3. Examples of Network Pharmacy Rules

3.1. Preferred Pharmacy Networks
3.1.1. Rule: Create a tiered network with preferred pharmacies offering lower co-
payments or better pricing for patients.
3.1.2. Example: Patients using preferred pharmacies pay SAR 10 for generics
versus SAR 20 at non-preferred pharmacies.

Page 33 of 43
 3.2. Reimbursement Structures
3.2.1. Rule: Establish reimbursement rates based on negotiated discounts and
performance metrics.
3.2.2. Example: Pharmacies receive higher reimbursement rates for
demonstrating high patient adherence rates and low error rates.

3.3. Generic Substitution Policies

3.3.1. Rule: Mandate the dispensing of generic medications when available,
unless specifically prohibited by the prescriber.
3.3.2. Example: Pharmacies are required to dispense generic statins unless the
prescriber indicates “brand necessary” on the prescription.

3.4. Specialty Pharmacy Integration

3.4.1. Rule: Include specialty pharmacies in the network to handle high-cost,
complex medications requiring special handling or monitoring.
3.4.2. Example: Specialty medications like biologics for rheumatoid arthritis must
be dispensed through a network specialty pharmacy.

4. Benefits of Network Pharmacy Rules

4.1. Cost Savings:
Achieve significant cost savings through negotiated rates and efficient network
management.

4.2. Improved Access:

Ensure patients have easy access to medications through a well-distributed
network of pharmacies.

4.3. Enhanced Quality of Care:

Promote high standards of care and patient safety through rigorous accreditation
and performance monitoring.

4.4. Support for Adherence:

Improve medication adherence and health outcomes through targeted
pharmacy services and patient support programs.

5. Challenges and Considerations

5.1. Network Adequacy:
Ensuring sufficient coverage, especially in rural or underserved areas, to avoid
patient access issues.

5.2. Pharmacy Relations:

Maintaining positive relationships with pharmacies, which may be strained by
aggressive cost-containment measures or reimbursement cuts.

5.3. Regulatory Compliance:

Navigating complex regulatory requirements and ensuring network pharmacies
comply with laws.

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 5.4. Patient Choice:
Balancing cost control with patient choice and convenience, as restrictive
networks may limit pharmacy options for patients.

6. Mitigating Challenges
6.1. Flexible Network Design
6.1.1. Geographic Analysis: Conduct thorough geographic analysis to ensure
adequate pharmacy coverage and avoid gaps in access.
6.1.2. Tiered Networks: Offer tiered networks to provide options for cost savings
while maintaining broad access for patients.

6.2. Stakeholder Engagement

6.2.1. Pharmacy Collaboration: Work closely with pharmacies to address
concerns, provide support, and ensure mutual benefits from network
participation.
6.2.2. Patient Communication: Clearly communicate network rules and benefits
to patients, ensuring they understand their options and how to maximize their
benefits.

6.3. Regulatory Compliance

6.3.1. Continuous Monitoring: Implement robust monitoring systems to ensure
compliance with all regulatory requirements and promptly address any issues.
6.3.2. Policy Updates: Regularly update network rules and policies in response to
changes in regulations and industry standards.

6.4. Enhancing Patient Experience

6.4.1. Convenience Services: Incorporate services like mail-order and 24/7
pharmacies to enhance patient convenience and access.
6.4.2. Support Programs: Develop and promote patient support programs to assist
with medication management, adherence, and cost issues.

Page 35 of 43
 X – Compliance and Regulatory Rules
Compliance and monitoring rules are essential components of Pharmaceutical Benefit
Management (PBM) strategies aimed at ensuring adherence to regulatory requirements,
contractual obligations, and internal policies.

These rules govern various aspects of PBM operations, including claims processing,
network management, fraud prevention, and quality assurance.

1. Purpose of Compliance and Monitoring Rules

1.1. Regulatory Adherence:
Ensure compliance with federal, state, and local regulations governing
pharmacy benefit management, healthcare, and privacy.

1.2. Contractual Obligations:

Fulfill obligations outlined in contracts with health plans, employers, pharmacies,
and other stakeholders.

1.3. Fraud and Abuse Prevention:

Detect and prevent fraud, waste, and abuse in claims processing and pharmacy
operations.

1.4. Quality Assurance:

Monitor performance metrics and outcomes to ensure the delivery of high-quality
pharmacy services and patient care.

2. Components of Compliance and Monitoring Rules

2.1. Regulatory Compliance
2.1.1. Saudi Health Information Exchange Policies Compliance:
Ensure compliance with the Saudi Health Information Exchange Policies and
regulations to protect patient privacy and confidentiality.

2.1.2. Saudi Anti-Bribery and Corruption Laws:

Adhere to Saudi laws prohibiting kickbacks, inducements, and self-referral
arrangements that could influence patient care or referrals.

2.1.3. Saudi Licensing Requirements:

Maintain appropriate licensure and accreditation for PBM operations,
including pharmacy licensure and pharmacist registration.

2.2. Contractual Compliance

2.2.1. Service Level Agreements (SLAs):
Meet contractual obligations related to claims processing timeliness, network
adequacy, and service quality.

Page 36 of 43
 2.2.2. Network Contracts:
Adhere to terms and conditions outlined in contracts with pharmacies,
including reimbursement rates, formulary compliance, and performance
standards.

2.3. Fraud, Waste, and Abuse (FWA) Prevention

2.3.1. Claims Review:
Conduct regular audits and reviews of claims data to identify patterns
indicative of fraudulent or abusive practices.

2.3.2. Provider Credentialing:

Screen and credential network pharmacies and providers to ensure
compliance with eligibility criteria and licensing requirements.

2.3.3. Fraud Detection Tools:

Utilize advanced analytics and fraud detection algorithms to identify
suspicious activities and anomalies in claims data.

2.4. Quality Assurance and Performance Monitoring

2.4.1. Performance Metrics:
Define key performance indicators (KPIs) related to claims processing
accuracy, pharmacy network performance, medication adherence, and
patient outcomes.

2.4.2. Audits and Reviews:

Conduct internal and external audits to evaluate compliance with policies
and procedures, contractual obligations, and regulatory requirements.

2.4.3. Quality Improvement Initiatives:

Implement corrective actions and quality improvement initiatives based on
audit findings and performance metrics to enhance operational efficiency
and service quality.

2.5. Compliance Training and Education

2.5.1. Employee Training:
Provide comprehensive training programs for PBM staff on compliance
policies, regulatory requirements, and fraud prevention strategies.

2.5.2. Pharmacy Education:

Offer training and educational resources for network pharmacies on billing
practices, documentation requirements, and fraud prevention measures.

3. Examples of Compliance and Monitoring Rules

3.1. Saudi Health Information Exchange Policies Compliance
3.1.1. Rule: Implement measures to safeguard protected health information (PHI)
and ensure compliance with Saudi Health Information Exchange Policies
Privacy and Security Rules.

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 3.1.2. Example: Encrypt electronic PHI (ePHI), implement access controls, and
conduct regular security risk assessments.
3.2. Fraud Prevention
3.2.1. Rule: Establish procedures for detecting and preventing fraudulent
activities, such as billing for medications not dispensed or engaging in
inappropriate referral arrangements.
3.2.2. Example: Use data analytics to identify aberrant billing patterns and
conduct targeted investigations.

3.3. Contractual Compliance

3.3.1. Rule: Ensure adherence to contractual obligations, including network
adequacy, claims processing accuracy, and performance standards.
3.3.2. Example: Monitor network pharmacies' compliance with formulary
requirements and reimbursement rates specified in contracts.

3.4. Quality Assurance

3.4.1. Rule: Establish performance metrics and quality benchmarks to monitor
and improve operational efficiency and service quality.
3.4.2. Example: Conduct regular audits of claims processing accuracy and
pharmacy network performance, with action plans for addressing
deficiencies.

4. Benefits of Compliance and Monitoring Rules

4.1. Risk Mitigation:
Minimize legal and financial risks associated with non-compliance, fraud, and
regulatory violations.

4.2. Operational Efficiency:

Streamline operations and reduce errors through effective monitoring and quality
assurance measures.

4.3. Patient Safety:

Enhance patient safety and quality of care by identifying and addressing
compliance issues and quality deficiencies.

4.4. Stakeholder Confidence:

Build trust and confidence among stakeholders, including health plans,
employers, patients, and regulatory agencies.

5. Challenges and Considerations

5.1. Complex Regulatory Landscape:
Navigate diverse and evolving regulatory requirements at the federal, state, and
local levels.

5.2. Resource Constraints:

Allocate sufficient resources for compliance and monitoring activities, including
personnel, technology, and training.

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 5.3. Adaptive Strategies:
Adapt compliance programs and monitoring protocols to address emerging risks
and regulatory changes.

5.4. Balancing Act:

Balance the need for compliance with operational efficiency and patient care
considerations.

6. Mitigating Challenges
6.1. Robust Compliance Programs
6.1.1. Comprehensive Policies: Develop and maintain comprehensive policies
and procedures covering all aspects of PBM operations and regulatory
compliance.
6.1.2. Continuous Training: Provide ongoing training and education for
employees and network pharmacies to ensure awareness of compliance
requirements and best practices.

6.2. Technology Solutions

6.2.1. Automated Monitoring: Utilize advanced analytics and software solutions to
automate compliance monitoring and fraud detection processes.
6.2.2. Integrated Systems: Integrate compliance monitoring tools with existing
PBM systems to streamline data analysis and reporting.

6.3. Collaborative Approach

6.3.1. Stakeholder Engagement: Foster collaboration with stakeholders, including
pharmacies, regulators, and industry associations, to address compliance
challenges and share best practices.
6.3.2. External Audits: Engage independent auditors or consultants to conduct
periodic audits and reviews of compliance programs and processes.

6.4. Continuous Improvement

6.4.1. Feedback Mechanisms: Establish mechanisms for collecting feedback from
employees, pharmacies, and other stakeholders to identify areas for
improvement and address compliance gaps.
6.4.2. Adaptive Strategies: Stay abreast of regulatory changes and industry trends
to adapt compliance programs and monitoring strategies accordingly.

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 XI – Specialty Pharmacy Rules
Specialty pharmacy management is a critical aspect of Pharmaceutical Benefit
Management (PBM) focused on handling high-cost, high-complexity medications often
used to treat chronic, rare, or complex conditions.

These medications require special handling, administration, and monitoring, making their
management distinct from traditional pharmacy operations.

1. Purpose of Specialty Pharmacy Management

1.1. Cost Management:
Control the high costs associated with specialty medications through negotiated
pricing, utilization management, and adherence programs.

1.2. Patient Support:

Provide comprehensive support services to ensure proper medication use,
adherence, and management of side effects.

1.3. Quality of Care:

Maintain high standards of care through specialized handling, administration,
and monitoring of specialty medications.

1.4. Regulatory Compliance:

Ensure compliance with regulatory requirements and guidelines specific to
specialty medications.

2. Components of Specialty Pharmacy Management

2.1. Network Development and Accreditation
2.1.1. Specialty Pharmacy Network: Establish a network of accredited specialty
pharmacies with expertise in handling complex medications.
2.1.2. Accreditation Standards: Require network pharmacies to meet rigorous
accreditation standards, such as those set by MoH, SFDA, CHI, or NPHIES, to
ensure quality and safety.

2.2. Utilization Management

2.2.1. Prior Authorization: Implement strict prior authorization processes to ensure
the appropriate use of specialty medications based on clinical criteria.
2.2.2. Step Therapy: Require patients to try more cost-effective treatments before
advancing to specialty medications, if clinically appropriate.

2.3. Patient Support and Education

2.3.1. Patient Education: Provide education on medication use, administration,
potential side effects, and management strategies.
2.3.2. Adherence Programs: Develop adherence programs, including regular
follow-ups, refill reminders, and synchronization services to ensure patients
stay on therapy.

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 2.4. Clinical Management and Monitoring
2.4.1. Care Coordination: Coordinate care among healthcare providers,
patients, and specialty pharmacies to ensure comprehensive management
of complex conditions.
2.4.2. Outcome Tracking: Monitor patient outcomes and medication efficacy
through regular assessments and data collection.

2.5. Financial Assistance and Cost Management

2.5.1. Co-Pay Assistance: Offer co-pay assistance programs to help patients
afford specialty medications.
2.5.2. Manufacturer Programs: Collaborate with manufacturers for patient
assistance programs and rebates to manage costs.

2.6. Data Analytics and Reporting

2.6.1. Utilization Reports: Generate reports on medication use, adherence rates,
and clinical outcomes to inform decision-making and optimize therapy.
2.6.2. Compliance Monitoring: Monitor compliance with utilization management
criteria and regulatory requirements through data analytics.

3. Examples of Specialty Pharmacy Management Practices

3.1. Disease-Specific Programs
3.1.1. Example: A program for managing multiple sclerosis (MS) patients that
includes comprehensive care coordination, medication management, and
regular monitoring of disease progression.

3.2. Prior Authorization and Step Therapy

3.2.1. Example: Requiring prior authorization for biologics used in rheumatoid
arthritis to ensure patients have tried conventional DMARDs (disease-
modifying antirheumatic drugs) first.

3.3. Patient Support Services

3.3.1. Example: Providing oncology patients with dedicated case managers who
offer education, support, and coordination of care, including assistance with
navigating side effects and insurance issues.

3.4. Cost Management Strategies

3.4.1. Example: Utilizing financial assistance programs and manufacturer rebates
to lower out-of-pocket costs for patients on high-cost specialty medications
like hepatitis C treatments.

4. Benefits of Specialty Pharmacy Management

4.1. Improved Patient Outcomes:
Enhanced patient care and outcomes through comprehensive support and
management programs tailored to complex conditions.

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 4.2. Cost Containment:
Effective cost management strategies help control the high expenses associated
with specialty medications.

4.3. Increased Adherence:

Targeted adherence programs ensure patients take their medications as
prescribed, improving health outcomes and reducing complications.

4.4. Enhanced Coordination:

Better coordination of care among providers, pharmacies, and patients ensures
seamless management of complex therapies.

5. Challenges and Considerations

5.1. High Costs:
Specialty medications are often expensive, posing financial challenges for both
patients and healthcare plans.

5.2. Complex Administration:

Many specialty medications require special handling, storage, and
administration, necessitating extensive patient and provider education.

5.3. Regulatory Compliance:

Navigating the complex regulatory landscape for specialty medications requires
diligent compliance and monitoring efforts.

5.4. Patient Access:

Ensuring patients have timely and equitable access to specialty medications can
be challenging, especially in underserved areas.

6. Mitigating Challenges
6.1. Financial Assistance Programs
6.1.1. Co-Pay Assistance: Expand co-pay assistance and patient assistance
programs to help mitigate the high costs of specialty medications.
6.1.2. Insurance Navigation: Provide support to help patients navigate insurance
coverage and access financial resources.

6.2. Education and Training

6.2.1. Patient Education: Invest in robust patient education programs to ensure
patients understand their treatment regimens and how to manage their
conditions.
6.2.2. Provider Training: Offer training for healthcare providers on the proper
handling, administration, and monitoring of specialty medications.

6.3. Technology Integration

6.3.1. EHR Integration: Integrate electronic health records (EHRs) with specialty
pharmacy management systems to streamline data sharing and care
coordination.

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 6.3.2. Telehealth Services: Utilize telehealth services to provide remote patient
monitoring and support, particularly in rural or underserved areas.

6.4. Partnerships and Collaboration

6.4.1. Manufacturer Collaboration: Partner with drug manufacturers for patient
assistance programs and to stay informed about new specialty medications
and indications.
6.4.2. Healthcare Provider Collaboration: Foster collaboration among healthcare
providers to ensure comprehensive and coordinated care for patients on
specialty therapies.

7. Examples of Successful Specialty Pharmacy Management Programs

7.1. HIV/AIDS Management
7.1.1. Program: Comprehensive management program for HIV/AIDS patients that
includes medication adherence support, regular monitoring of viral load, and
coordination of care among infectious disease specialists, pharmacists, and
primary care providers.

7.2. Oncology Support

7.2.1. Program: Oncology specialty pharmacy program offering personalized
support services, including chemotherapy education, side effect
management, and financial counseling.

7.3. Autoimmune Disease Management

7.3.1. Program: Specialized program for managing patients with autoimmune
diseases, providing access to biologics and advanced therapies, regular
follow-ups, and outcome tracking.

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