Medication Policy

Medication Policy Manual

Policy No: dru150

Topic: Medication Policy Manual Introduction

Date of Origin: 09/07/2007

Committee Approval Date: June 10, 2016

Next Review Date: 04/2017



Effective Date: July 1, 2016




Medication Policy Development and Review Process

Purpose of the Manual

Purpose of the Manual

The purpose of OmedaRx medication policy is to provide criteria and guidelines for determining coverage of specific medications.In order to be eligible for coverage, all medications must be medically necessary (unless otherwise provided in the member's benefits contract). To the extent there are any conflicts between OmedaRx medication policy guidelines and applicable contract language, the contract language prevails. OmedaRx medication policy is not intended to override the health insurance policy that defines the insuredís benefits, nor is it intended to dictate to providers how to practice medicine. Physicians and other health care providers are expected to exercise their medical judgment in providing the most appropriate care. The policies are not intended to constitute medical advice and do not guarantee any results or outcomes. They are meant to be consistent statements of medical necessity criteria for coverage through available benefits.


Policy Development

Issues are selected for medication policy development through referrals from OmedaRx staff, the physician and provider community, and members. Priority may be given to the following:

                     New medications for which there are scientifically-proven, safe, effective alternatives.

                     Medications that have generated a high level of interest for members and/or providers.

                     Medications that may be prescribed for conditions that are not a covered benefit.

                     Medications that are controversial with respect to their ability to improve net health outcome.

                     New information available in the peer-reviewed scientific literature or other evidence-based resources that may change the status of an indication for a medication from investigational to medically necessary.


The following sources are considered in the development and revision of OmedaRx medication policies:

                     Current published medical literature from peer-reviewed publications.

                     Evidence-based clinical practice guidelines developed by national organizations and recognized authorities.

                     Generally accepted standards of medical practice.

                     External practicing physician review.

                     Government approval status.

                     FDA Drug Safety Communications

                     FDA Advisory Committee briefing documents or minutes

                     National medication compendia, including, but not limited to AHFS (American Hospital Formulary Service) Drug Information, Thomson Micromedex DrugDex, National Comprehensive Cancer Network (NCCN) Drugs and Biologics Compendium, and U.S. Pharmacopeia Drug Information.

                     Policies and technology assessments published by the BlueCross BlueShield Association and the BlueCross BlueShield Association Technology Evaluation Center (TEC).


Definition of Medical Necessity

Medically necessary or medical necessity means health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating illness, injury, disease or its symptoms, and that are:

(a)††††††† in accordance with generally accepted standards of medical practice;

(b)††††††† clinically appropriate in terms of type, frequency, extent, site and duration, and considered effective for the patientís illness, injury or disease; and

(c) †††††† not primarily for the convenience of the patient, physician, or other health care provider; and

(d)††††††† not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patientís illness, injury or disease


Generally Accepted Standards of Medical Practice

Generally accepted standards of medical practice means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, physician specialty society recommendations, the views of physicians practicing in relevant clinical areas, and any other relevant factors.


Definition of Investigational Services

In this manual, the term "investigational" means that the medical technology does not meet OmedaRx technology assessment criteria, as defined below. If any one or more of the criteria are not met, the technology will be determined to be investigational. In addition, all services specifically associated with the investigational technology, including, but not limited to, associated procedures, treatments, supplies, devices, equipment, facilities or drugs, will also be considered investigational.


FDA Approval

A medication that has an IND (Investigational New Drug) designation has not received final approval from the FDA, and may not be marketed.An approved NDA (New Drug Application), ANDA (Abbreviated New Drug Application), or BLA (Biologic License Application) is considered final FDA-marketing approval for the purposes of this policy. A medicationís NDA, ANDA, or BLA may be located at:

The FDA may require post marketing surveillance for certain medications that have received final marketing approval.

The term "orphan drug" refers to a product that treats a rare disease affecting fewer than 200,000 Americans.Orphan designation is not synonymous to FDA-approval. Instead, orphan designation qualifies the manufacturer for tax credit and marketing incentives for their product. The orphan drug designation is independent from marketing approval status and may apply to medications that are either approved or unapproved for marketing.Medications and vaccines that have not received final FDA marketing approval for any indication are considered investigational.

Off-label Use

For FDA-approved indications, also known as labeled indications, the FDA has reviewed and approved the drug for the specified indications for final marketing based on adequate, well-controlled clinical trials which have documented safety and effectiveness. Under the Federal Food, Drug and Cosmetic (FD&C) Act, pharmaceutical manufacturers can only promote, advertise, and include information on the package insert for FDA-approved indications. However, the FD&C Act does not limit the indications or manner in which a physician prescribes the drug. The use of a medication for conditions or indications other than those approved by the FDA is known as ďoff-label useĒ. Such off-label use may be appropriate and rational in certain circumstances.For the purposes of this policy, orphan drug status has no significance in the evaluation of off-label treatments.



OmedaRx considers vaccines to be medically necessary as of the effective date of a recommendation made by any of the following:

         U.S. Preventive Services Task Force

         American Academy of Pediatrics

         Advisory Committee on Immunization Practices

Vaccines are reimbursed according to the memberís available benefits.


Technology Assessment Process

The technology assessment process is applied to both the development of new medication policies and the updating of existing policies. In order to determine whether a medication may be considered medically necessary, literature searches are conducted and the published scientific evidence related to each medication is reviewed against three technology assessment criteria. In order for a medication to be considered medically necessary for an indication, all three criteria must be met. As noted above, if any one or more of the following criteria are not met, then the medication is considered investigational:

1.            The medication must have final marketing approval from the appropriate government regulatory body, specifically, the Food and Drug Administration (FDA). Final marketing approval is evidenced by an approved NDA, ANDA, or BLA (New Drug Application, Abbreviated New Drug Application, or Biologic License Application). A medicationís NDA, ANDA, or BLA may be located at: approval that is granted as an interim step (i.e., Treatment IND) in the FDA regulatory process is not sufficient.

††††††††††† The scientific evidence must permit conclusions concerning the effect of the medication on health outcomes. The evidence should consist of well-designed and well-conducted investigations published in peer-reviewed journals. The quality of the body of studies and the consistency of the results are considered in evaluating the evidence. Opinions and evaluations by national medical associations, consensus panels, clinical practice guidelines, or other technology evaluation bodies are evaluated according to the scientific quality of the supporting evidence and rationale.

2.            The medication must improve the net health outcome. Scientific evidence and expert opinion provide the basis for summarizing the potential net health outcome. The evidence should demonstrate that the medication can alter the physiological changes related to a disease, injury, illness or condition. In addition, there should be evidence or a convincing argument based on established medical facts that such alteration affects the health outcomes.

3.            The medication should improve the net health outcome as much as or more than established alternatives.


External Physician Review

All new and revised OmedaRx medication policies are sent for review in draft form to external practicing physicians. Physicians who wish to participate in this process may contact OmedaRx Medical Policy at:


Approval Process

All policy drafts, including analyses of the scientific evidence and summaries of the external expert opinion, are presented to the OmedaRx Medication Policy Group (MPG) for final approval. The OmedaRx MPG consists of professional medication policy staff and physician medical directors from Idaho, Oregon, Utah and Washington.


Medication Policy Updates

Medication policies are re-evaluated and updated regularly. Policies may be reviewed prior to their scheduled annual review date if new scientific evidence that would alter the policy criteria becomes available sooner.


Medication Policy Dissemination

                     Medication policies are published on-line and available to members and providers at

                     Significant policy changes are communicated through provider newsletters and are noted on-line at


Cross References

OmedaRx Medication Policy Group Charter


1.       FDA. Federal Food, Drug, and Cosmetic Act (FD&C Act). Page last updated 10/5/2015. [cited 4/13/2016];

2.       FDA. New Drug Application (NDA). Page last updated: 3/9/2016. [cited 4/13/2016]; Available from:

3.       Orphan Drug Act. Page last updated: 7/18/2013. [cited 4/13/2016];

4.       FDA. Designating an orphan product: Drugs and biologics. Page last updated: 10/7/2015. [cited 4/13/2016];


Revision History

Revision Date

Revision Summary


Clarified definition of orphan drugs