The Importance of Prior Authorization in the Pharmacy

10/18/2022

by Lorenza Jackson, RPhT, CPI, MBA

No doubt, many working in the pharmacy profession have heard the term prior authorization or PA, particularly those who work in retail, specialty pharmacy, or managed care settings. As well as having experienced the frustration and anxiety patients and providers demonstrate when told a PA is needed.

Healthcare.gov defines prior authorization as “approval from a health plan that may be required before you get a service or fill a prescription for the service or prescription to be covered by your plan.”

A medication prior authorization may be initiated or submitted by a provider, pharmacy, or patient for review by an insurance company (manage care organization) or Pharmacy Benefit Management (PBM) company. This helps determine if the prescribed medication will be redirected, approved, denied, or appealed for further review after a denial.

So, why is prior authorization needed, and what does it entail? Prior authorization began in the 1960s with the use of utilization review, which started at the beginning of Medicare and Medicaid legislation. During that time, the primary use was to verify an admission into a hospital. However, with the advancement of pharmaceutical Research and Development(R&D), and thus cost –prior authorization has evolved into the present-day management paradigm. Where Manage Care Organizations (MCO) use prior authorization as a tool to decipher which medications are worth reimbursing.

Prior authorization is a complex management process implemented to contain costs while providing quality pharmaceutical care. A panel of experts or those from a Pharmacy and Therapeutics (P&T) committee (physicians, clinical experts, such as pharmacists) develop guidelines or protocols to promote appropriate and effective prescription drug use for each prior authorization.

Appropriate and effective optimization for patient outcomes through medication use is established efficacy and safety. A well-implemented, evidence-based prior authorization system ensures that patients receive the most appropriate medication while reducing error, waste, and unnecessary prescription drug use and cost.

Therapeutic medications that warrant prior authorization include:

Drugs that are FDA-approved for only certain health conditions
Drugs that are prescribed when an alternative (less expensive) is available might be as efficacious.
Drugs that have detrimental side effects
Drugs that are harmful when combined with other drugs
Drugs that are potentially or often misused or abused
Drugs with many interactions that can be potentially harmful.

Types of medications requiring a prior authorization include:

Expensive, particularly those used to treat chronic conditions, and are usually dispensed at a specialty pharmacy.
Brand-name drug that have a cost-effective generic available
Drugs used at higher doses (greater than standard doses)
Drugs used to treat non-life-threatening conditions
Drugs considered medically necessary by a provider because other options are ineffective or there are no other options.
Drugs use for cosmetic reasons.

There are several prior authorization approaches utilized in a prescription drug benefit. Such approaches include (but not limited to):

Step therapy–the use of a clinically recognized first-line drug to treat a condition before approval of a more expensive or complex second-line drug is authorized. This approach ensures a cost-effective therapy is utilized prior to progressing to other therapies.
- Example: Nonsteroidal anti-inflammatory drugs (NSAIDs) that have been tried and failed prior to Euflexxa (hyaluronic acidintra-articular injection) to treat arthritis.
Quantity limits–the limitation on the quantity amount of a drug
- Example: Opioids, a patient may not exceed a certain amount of Morphine Milliequivalent (MME) per day.
Age limits– a drug requires a prior authorization if a particular age does not meet drug manufacturer, FDA, or clinical recommendations.
- Example: Quinolones in pediatric patients will require a prior authorization because, according to FDA-approved product labeling –an increase in adverse reactions to joints and surrounding tissue (cartilage) has been observed. Although prior authorization is complicated and may have repercussions for patients, such as delay in treatment, disease progression, or a decrease in treatment adherence, management is important to contain cost, promote safety, and assure effectiveness.

With continued pharmaceutical advancements and increased use of gene therapies, biologics, and specialty products, which are increasingly becoming the standard of therapy, prior authorization will continue to be utilized and more likely to sophisticate further in evolvement.

References:

1. DeMarzo, Amanda. “What Is Prior Authorization.” What Is Prior Authorization? - Prior Authorization Training, 15 Dec. 2020, https://www.priorauthtraining.org/prior-authorization/

2. “The Evolution of Prior Authorizations.” The Evolution of Prior Authorization - Prior Authorization Training, 28 Dec. 2021, https://www.priorauthtraining.org/the-evolution-of-prior-authorizations/

3. “Prior Authorization Process.” Pharmacies - Prior Authorization, 2022, https://www.navitus.com/pharmacies/prior-authorization

4. “Prior Authorization.” Prior Authorization | AMCP.org, 18 July 2019, https://www.amcp.org/about/managed-care-pharmacy-101/concepts-managed-care-pharmacy/prior-authorization

5. “Why do I need prior authorization for a prescription drug?” Why do I need prescription prior authorization? | bcbsm.com, https://www.bcbsm.com/index/health-insurance-help-faqs/plan-types/pharmacy/why-do-i-need-prior-authorization-for-prescription-drug.html

6. Prior Authorization for Prescription Drugs: What You Need To Know, 11 Mar. 2022, https://www.healthmarkets.com/resources/health-insurance/prior-authorization-for-prescription-drugs/

7. “Prior Authorization, Step Therapy and Quantity Limits.” Prior Authorization, Step Therapy and Quantity Limits | Michigan Complete Health (Medicare-Medicaid Plan), https://mmp.michigancompletehealth.com/mmp/prescription-drug-part-d/prior-auth.html

8. https://www.clinicalkey.com/pharmacology

References: 1. DeMarzo, Amanda. “What Is Prior Authorization.” What Is Prior Authorization? -Prior Authorization Training, 15 Dec. 2020, https://www.priorauthtraining.org/prior-authorization/2. “The Evolution of Prior Authorizations.” The Evolution of Prior Authorization -Prior Authorization Training, 28 Dec. 2021, https://www.priorauthtraining.org/the-evolution-of-prior-authorizations/3. “Prior Authorization Process.” Pharmacies -Prior Authorization, 2022, https://www.navitus.com/pharmacies/prior-authorization4. “Prior Authorization.” Prior Authorization | AMCP.org, 18 July 2019, https://www.amcp.org/about/managed-care-pharmacy-101/concepts-managed-care-pharmacy/prior-authorization5. “Why do I need prior authorization for a prescription drug?” Why do I need prescription prior authorization? | bcbsm.com, https://www.bcbsm.com/index/health-insurance-help-faqs/plan-types/pharmacy/why-do-i-need-prior-authorization-for-prescription-drug.html6.Prior Authorization for Prescription Drugs: What You Need To Know, 11 Mar. 2022, https://www.healthmarkets.com/resources/health-insurance/prior-authorization-for-prescription-drugs/7. “Prior Authorization, Step Therapy and Quantity Limits.” Prior Authorization, Step Therapy and Quantity Limits |Michigan Complete Health (Medicare-Medicaid Plan), https://mmp.michigancompletehealth.com/mmp/prescription-drug-part-d/prior-auth.html8.https://www.clinicalkey.com/pharmacology

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The Importance of Prior Authorization in the Pharmacy