Copayments for Medications Beginning January 1, 2017, 196-204 [2015-33052]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 81, Number 2 (Tuesday, January 5, 2016)]
[Proposed Rules]
[Pages 196-204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33052]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP35


Copayments for Medications Beginning January 1, 2017

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations concerning copayments charged to certain veterans for 
medication required on an outpatient basis to treat non-service 
connected conditions. VA currently charges non-exempt veterans either 
$8 or $9 for each 30-day or less supply of medication, and under 
current regulations, a calculation based on the prescription drug 
component of the Medical Consumer Price Index would be used to 
determine the copayment amount in future years. This rulemaking would 
eliminate the formula used to calculate future rate increases and 
establish three classes of medications, identified as Tier 1, Tier 2, 
and Tier 3. These tiers would be defined further in the rulemaking and 
would be distinguished in part based on whether the medications are 
available from multiple sources or a single source, with some 
exceptions. Copayment amounts would be fixed and would vary depending 
upon the class of medication. The following copayment amounts would be 
effective January 1, 2017: $5 for a 30-day or less supply of a Tier 1 
medication, $8 for a 30-day or less supply of a Tier 2 medication, and 
$11 for a 30-day or less supply of a Tier 3 medication. For most 
veterans these copayment amounts would result in lower out-of-pocket 
costs, thereby encouraging greater adherence to prescribed medications 
and reducing the risk of fragmented care that results when veterans use 
multiple pharmacies to fill their prescriptions.

DATES: Comment Date: Comments must be received by VA on or before March 
7, 2016.

ADDRESSES: Written comments may be submitted by email through https://www.regulations.gov; by mail or hand-delivery to Director, Regulation 
Policy and Management (02REG), Department of Veterans Affairs, 810 
Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202) 
273-9026. Comments should indicate that they are submitted in response 
to ``RIN 2900-AP35-Copayments for Medications Beginning January 1, 
2017.'' Copies of comments received will be available for public 
inspection in the Office of Regulation Policy and Management, Room 
1068, between the hours of 8:00 a.m. and 4:30 p.m., Monday through 
Friday (except holidays). Please call (202) 461-4902 for an 
appointment. (This is not a toll-free number.) In addition, during the 
comment period, comments may be viewed online through the Federal 
Docket Management System (FDMS) at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kristin Cunningham, Chief Business 
Office (10NB), Veterans Health Administration, Department of Veterans 
Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 382-2508. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 1722A(a), VA must require 
veterans to pay a $2 copayment for each 30-day supply of medication 
furnished on an outpatient basis for the treatment of a non-service-
connected disability or condition, unless the veteran is exempt from 
having to pay a copayment because the veteran has a service-connected 
disability rated 50 percent or more, is a former prisoner of war, or 
has an annual income at or below the maximum annual rate of VA pension 
that would be payable if the veteran were eligible for pension. Under 
38 U.S.C. 1722A(b), VA ``may,'' by regulation, increase that copayment 
amount and establish a maximum annual copayment amount (a ``cap''). We 
have consistently interpreted section 1722A(b) to mean that VA has 
discretion to determine the appropriate copayment amount (as long as 
that amount is at least $2) for medication furnished on an outpatient 
basis for covered treatment, provided that any increase in the 
copayment amount or annual cap is the subject of a rulemaking 
proceeding. VA is also prohibited under 38 U.S.C. 1722A(a)(2) from 
requiring a veteran to pay an amount in excess of the cost to VA. We 
have implemented this statute in 38 CFR 17.110.
    Under 38 CFR 17.110(b)(1), veterans are obligated to pay a 
copayment for each 30-day or less supply of medication provided by VA 
on an outpatient basis (other than medication administered during 
treatment). Under the current regulation, for the period from July 1, 
2010, through December 31, 2015, the copayment amount for veterans in 
priority categories 2 through 6 of VA's health care system is $8. 38 
CFR 17.110(b)(1)(i). For the period July 1, 2010, through December 31, 
2015, the copayment amount for veterans in priority categories 7 and 8 
is $9. 38 CFR 17.110(b)(1)(ii). Thereafter, the

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copayment amount for all affected veterans is to be established using a 
formula based on the prescription drug component of the Medical 
Consumer Price Index (CPI-P), set forth in regulation in 38 CFR 
17.110(b)(1)(iii).
    Current Sec.  17.110(b)(2) also includes a ``cap'' on the total 
amount of copayments in a calendar year for a veteran enrolled in one 
of VA's health care enrollment system priority categories 2 through 6. 
Through December 31, 2015, the annual cap is set at $960. Thereafter, 
the cap increases ``by $120 for each $1 increase in the copayment 
amount'' applicable to veterans enrolled in one of VA's health care 
enrollment system priority categories 2 through 6.
    VA has found that the current regulatory model has produced and 
will continue to produce copayment amounts that increase at a higher 
rate than the larger, non-VA retail market for prescribed medications. 
For this reason, VA has published a series of rulemakings that have 
``frozen'' copayments from 2009 to the present. In these rulemakings, 
we stated that these freezes were appropriate because higher copayments 
reduce the utilization of VA pharmacy benefits. Even with the freezes 
VA has instituted, however, VA's copayment rates have exceeded those 
charged in other pharmacy benefits programs.
    In addition to higher copayments increasing the risk that veterans 
will not fill their prescriptions, VA's lack of competitive copayment 
pricing increases the likelihood that veterans will obtain their 
prescribed medications from other sources. Fragmentation of 
prescription records to more than one pharmacy increases the risk of an 
incomplete medication record, which can lead to unintended adverse 
reactions. Different clinicians caring for the patient may not be aware 
of all the medications that the patient is taking. VA medical providers 
need to be aware of all of the medications a veteran is taking to avoid 
unintended prescribing of contraindicated medications. Through this 
rulemaking, we believe that we can prevent or minimize these unintended 
or adverse effects of patients choosing multiple pharmacies to fill 
their prescriptions.
    A large body of academic research supports this position. 
Researchers have found that prescription copayments can affect 
medication adherence (Lieberman, D.A., J.M. Polinski, N.K. Choudhry, J. 
Avorn, and M.A. Fischer. 2014. Unintended consequences of a Medicaid 
prescription copayment plan. Medical Care. 52(5):422). Research also 
has found that higher copayment levels are associated with poor 
adherence, discontinuation, and non-initiation of therapy (Mann, B.S., 
L. Barnieh, K. Tang, D.J.T. Campbell, F. Clement, B. Hemmelgarn, M. 
Tonelli, D. Lorenzetti, B.J. Manns. Association between drug insurance 
cost sharing strategies and outcomes in patients with chronic diseases: 
a systematic review. PLOS ONE. 9(3):e89168). These findings are evident 
in a veteran study regarding lipid-lowering medication adherence. 
(Doshi, J.A., Zhu, J., Lee, B.Y., Kimmel, S.E., Volpp, K.G. 2009. 
Impact of a Prescription Copayment Increase on Lipid-Lowering 
Medications Adherence in Veterans. Circulation. 2009;119:390-397.). 
Other studies have also found that high copayment requirements can 
negatively influence adherence to prescription medication plans 
(Kazerooni, R., K. Vu, A. Tazikawa, C. Broadhead, and A.P. Morreale. 
Association of copayment and socioeconomic status with hormonal 
contraceptive adherence in a female veteran population. 2014. Women's 
Health Issues. 24(2):e237). Another team of researchers found that 
adherence rates are negatively affected by copayment rates, and that 
these effects vary based upon the disease burden of the patient; they 
also found that patients with low-comorbidity risks were more likely to 
be more affected by copayments, which may subsequently lead to adverse 
events that require more intensive and expensive health care services 
(Wang, V., C.F. Liu, C.L. Bryson, N.D. Sharp, and M.L. Maciejewski. 
2011. Does medication adherence following a copayment increase differ 
by disease burden? HSR: Health Services Research. 46(6):1963).
    The proposed rule would focus on the type of medication being 
prescribed and would remove the automatic escalator provision, meaning 
that changes in copayments would only occur through subsequent 
rulemakings. Veterans exempt by law from copayments under 38 U.S.C. 
1722A(a)(3) would continue to be exempt. VA proposes to include a 
definition of ``medication'' and to establish three classes of 
medications: Tier 1 medications, Tier 2 medications, and Tier 3 
medications. Tiers 1 and 2 would include multi-source medications, a 
term that would be defined in Sec.  17.110(b)(1)(iv). Tier 3 would 
include medications that retain patent protection and exclusivity and 
are not multi-source medications. Copayment amounts would vary 
depending upon the Tier in which the medication is classified. A 30-day 
or less supply of Tier 1 medications would have a copayment of $5. For 
Tier 2 medications, the copayment would be $8, and for Tier 3 
medications, the copayment would be $11.
    This proposed change would provide a financial benefit to many 
veterans because it would reduce their copayment liabilities for most 
medications and their overall liability under the copayment cap. An 
average veteran would be better off under this model than the current 
approach in nearly every scenario; the sole exception is veterans who 
only fill Tier 3 medications, but even this group would face the same 
copayment liabilities under the current regulation in 2017, and would 
face higher copayments in future years. These veterans would also often 
pay substantially more in the private sector to fill the same 
prescriptions. Based on a comparison of the current and proposed 
copayment amounts, we anticipate that most veterans would realize 
between a 10 and 50 percent reduction in their overall pharmacy 
copayment liability each year based on historic utilization patterns. 
By our estimates, 94 percent of copayment eligible veterans would 
experience no cost increase, and 80 percent would realize a savings of 
between $1 and $5 per 30-day equivalent of medications. The proposed 
copayment amounts intends to support patient adherence, reduce 
instances of veterans not filling prescription medications and 
assisting veteran health improvements from chronic disease. The 
following table shows how copayments would vary for veterans and 
different types of medications. Annual savings would be even greater 
for veterans with a large number of medication copayments. VA estimates 
that at least 50 percent of all billable prescriptions would be in Tier 
1, with no more than 35 percent in Tier 2, and approximately 15 percent 
in Tier 3. Exact estimates for Tier 1 and Tier 2 are not possible at 
this time and would depend on the final list of medications selected 
for Tier 1.

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                      Table 1--Typical User, Annual Cost of Copayments, Calendar Year 2017
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                                                                                                     Potential
                                                                      Tiered                          annual
                     Medication distribution                         copayment        Current     savings  under
                                                                     proposal       regulation        tiered
                                                                                                     proposal
----------------------------------------------------------------------------------------------------------------
100% Tier 1.....................................................            $150            $330            $180
50% Tier 1, 50% Tier 2..........................................             195             330             135
100% Tier 2.....................................................             240             330              90
50% Tier 1, 50% Tier 3..........................................             240             330              90
100% Tier 3.....................................................             330             330               0
----------------------------------------------------------------------------------------------------------------

    Initially, VA would make a clarifying amendment to Sec.  17.110(a) 
to define the term ``medication.'' As noted previously, VA is required 
by 38 U.S.C. 1722A to charge veterans at least a $2 copayment for each 
30-day or less supply of medication furnished on an outpatient basis 
for the treatment of non-service-connected disabilities or conditions, 
unless the veteran is otherwise exempt. VA has interpreted the term 
``medication'' in the past to include prescription and over-the-counter 
medications as determined by the Food and Drug Administration (FDA), 
but not medical supplies and nutritional items. This change would 
clarify that interpretation in regulation. Medical supplies and 
nutritional items, such as bandages, diabetic supplies, and catheters, 
would be excluded from the definition of medication, and hence not 
subject to the medication copayment requirements of this section. These 
are not considered medications and are not regulated by FDA as such, 
and consequently should be excluded from this definition.
    Medications are conventionally classified as either ``generic'' or 
``brand name'' medications, and generic medications generally are less 
expensive and more available than brand name medications. However, this 
simple classification does not capture all of the factors that affect 
the price and availability of medications. For example, when a brand 
manufacturer's patent protection and/or regulatory exclusivity ends, it 
sometimes authorizes the marketing of its brand name medication under a 
private label at generic prices; the FDA describes these products as 
``authorized generics'' at 21 CFR 314.3. In addition, even without the 
entry of an authorized generic, the price of most brand name drugs 
declines as generic competitors enter the market. Because generic 
medications, authorized generic medications, and brand name medications 
that face competition from generic medications typically are sold at 
lower prices than brand name medications that do not face such 
competition, VA would include all three classes of medications in a 
single class for copayment purposes. Because brand name medications 
that face competition from generic medications may still be sold at a 
higher price than their generic equivalents, however, VA would only 
include those brand name medications that face generic competition and 
are procured by VA under a contracting strategy in place that makes the 
brand name medication lower in cost than other generic sources. VA 
would be able to determine if these medications are lower in cost 
because the contracting strategy would have reviewed available prices 
and identified prices that are preferable to generic competition.
    Some medications also have multiple brand name products capable of 
being substituted because they work in the same way and in a comparable 
amount of time with the same active ingredients. This competition 
between brand name medications generally results in a lower price and 
so, VA would also include them in the same class as generic 
medications, authorized generic medications, and brand name medications 
that face competition from generic medications and are procured by VA 
under a contracting strategy in place that makes the brand name 
medication lower in cost than other generic sources. To avoid confusion 
that could arise by placing brand name medications and generic 
medications in the same class, VA would simply refer to these four 
types of medications together as multi-source medications. The term 
multi-source medication would be defined in Sec.  17.110(b)(1)(iv)(A). 
VA would then designate medications as Tier 1, Tier 2, and Tier 3. The 
first two tiers would consist of multi-source medications, but those in 
Tier 1 would have been selected by VA using a process described below 
and would be available at a lower copayment than medications in Tier 2. 
Tier 3 medications would include all other medications and would have 
the highest copayment amount.
    VA proposes to amend Sec.  17.110(b)(1) by revising the 
subparagraphs that currently identify the copayment rates for different 
priority groups of veterans. Specifically, VA would revise paragraph 
(b)(1)(i) to state that the copayment amount for a 30-day or less 
supply of Tier 1 medications, as defined in paragraph (b)(1)(iv), is 
$5. Paragraph (b)(1)(ii) of this section would state the copayment 
amount for a 30-day or less supply of Tier 2 medications is $8, and 
paragraph (b)(1)(iii) of this section would state the copayment amount 
for a 30-day or less supply of Tier 3 medications is $11.
    These copayment amounts are cost competitive with other health care 
plans, while still in line with VA's appropriated resources. Many large 
retailers offer a limited range of generic or multi-source medications 
between $1 and $4, but these plans often include premiums of more than 
$10 per month. VA does not charge veterans a premium, so their only 
out-of-pocket costs are the copayment amounts. In this context, we 
believe the $5 and $8 copayment amounts are comparable to what many 
veterans would pay for selected generic or multi-source medications 
from these retailers. The $11 amount for Tier 3 medications is a small 
increase ($2) for veterans in priority groups 7 and 8, and a modest 
increase ($3) for veterans in priority groups 2 through 6. The vast 
majority of our billable prescriptions (85 percent) are for medications 
that would be categorized as Tier 1 or Tier 2. For veterans receiving 
Tier 1 medications, there would be a price decrease of $3 in priority 
groups 2 through 6 and $4 in priority groups 7 and 8. The price for 
Tier 2 medications would remain unchanged for veterans in priority 
groups 2 through 6, but veterans in priority groups 7 and 8 would 
experience a ($1) price decrease for medications in this category. Even 
with an increase in the copayment amount for Tier 3 medications from 
their current levels, VA's pharmacy copayments for these drugs would 
remain a significant

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value for veterans, as many non-VA pharmacy plans charge $20, $30, or 
$40 or more for brand name medications, which comprise the bulk of Tier 
3 medications, in addition to regular premiums. Moreover, the pharmacy 
copayment amounts calculated using the existing regulations currently 
exceed $11 for veterans in priority categories 2 through 8.
    VA estimates that the copayment amounts would increase three times 
over 6 years if the current regulations are left unchanged. These 
increases are projected using the current regulation's methodology 
because VA has taken action to freeze medication copayments over the 
last several years, which has generated greater separation from the 
initial CPI-P as of September 30, 2001.
    VA would define the three classes of medications in proposed 
paragraph (b)(1)(iv)(B)-(D), which would be Tier 1, Tier 2, and Tier 3 
medications.
    As briefly described above, VA would define a ``multi-source 
medication'' that could be included in either Tier 1 or Tier 2 to 
include four types of medications. First, this would include a 
medication that has been and remains approved by the FDA either under 
sections 505(b)(2) or 505(j) of the Food, Drug, and Cosmetic Act (FDCA, 
21 U.S.C. 355) and that has an A-rating in the current version of the 
FDA's Approved Drug Products with Therapeutic Equivalence Evaluations 
(the Orange Book), or under section 351(k) of the Public Health Service 
Act (PHSA, 42 U.S.C. 262) and that has been granted an I or B rating in 
the current version of FDA's Lists of Licensed Biological Products with 
(1) Reference Product Exclusivity and (2) Biosimilarity or 
Interchangeability Evaluations (the Purple Book). Second, a multi-
source medication would also include medications that have been and 
remain approved by the FDA pursuant to FDCA section 505(b)(1) or PHSA 
section 351(a) and which are referenced by at least one FDA-approved 
product that meets the first definition of multi-source medication. 
These medications would be included only if they are covered by a 
contracting strategy in place with pricing such that it is lower in 
cost than other generic sources. Third, multi-source medications would 
include those medications that have been and remain approved by the FDA 
pursuant to FDCA section 505(b)(1) or PHSA section 351(a) and have the 
same active ingredient(s), work in the same way and in a comparable 
amount of time, and are determined by VA to be substitutable for 
another medication that has been and remains approved by the FDA 
pursuant to FDCA section 505(b)(1) or PHSA section 351(a). Insulin and 
levothyroxine are two examples of such medications. Finally, multi-
source medications would also include a listed drug, as defined in 21 
CFR 314.3, that has been approved under FDCA section 505(c) and is 
marketed, sold, or distributed directly or indirectly to retail class 
of trade with either labeling, packaging (other than repackaging as the 
listed drug in blister packs, unit doses, or similar packaging for use 
in institutions), product code, labeler code, trade name, or trademark 
that differs from that of the listed drug. These definitions cover the 
full range of medications that are broadly available and lack patent 
protection and exclusivity and which can be procured at a low price. 
This includes all generic medications, as well as brand name 
medications that are marketed as generic medications and medications 
with multiple substitutable options. Such medications are widely 
prescribed and used by both VA and non-VA providers and represent 
generally the lowest cost medications available. As such, these are 
ideally suited for a lower copayment rate.
    VA offers these medications to address a variety of chronic 
conditions common in our patient population, such as diabetes mellitus, 
hypertension, and hypercholesterolemia. If a significant portion of 
these prescriptions are filled with VA because of this rule, the 
potential clinical benefits could be far-reaching and significant, and 
therefore, we would encourage the use of these drugs by providing lower 
copayments. (We also note that, in addition to being a clear benefit to 
our veteran patients, far-reaching improved health outcomes would 
necessarily lead to lower future health care costs, although we cannot 
quantify these predicted cost benefits.) VA would separate multi-source 
medications into two categories: Tier 1 medications and Tier 2 
medications. Tier 1 medications would be multi-source medications that 
meet all of the criteria in proposed paragraph (b)(2) as explained in 
further detail below. Tier 2 would include multi-source medications 
that do not meet all of the criteria in (b)(2).
    Tier 3 medications would be defined as a medication approved by the 
FDA under a New Drug Application (NDA) or a biological product approved 
by the FDA pursuant to a biologics license agreement (BLA) that retains 
its patent protection and exclusivity and is not a multi-source 
medication identified in paragraph (b)(1)(iv)(A)(3). FDA publishes a 
list of the medications that have been approved under NDAs on its Web 
site at www.fda.gov.
    Proposed paragraph (b)(2) would identify how VA will determine 
whether a multi-source medication qualifies as a Tier 1 medication; all 
other multi-source medications would be Tier 2 medications under 
proposed paragraph (b)(1)(iv)(C). Although we believe that lowering 
copayments for prescription medications would improve clinical outcomes 
for veterans who take those medications, for budgetary reasons we must 
limit the number of medications that would qualify for a lower 
copayment amount as selected multi-source medications. This limitation 
should effectively target VA's health care resources to achieve maximum 
health benefits for veterans. For example, the reduction in copayments 
for affected medication must be significant enough to increase the 
likelihood that veterans would choose to fill their medications with 
VA, thereby leading to the clinical benefits we discuss above. Reducing 
the copayment amount for a limited group of medications that are used 
on a long-term basis by a large number of veterans would allow us to 
reduce the copayment by a significant amount while still extending this 
financial and clinical benefit to as many veterans as possible.
    Accordingly, in addition to excluding Tier 3 medications through 
the definition of the term ``multi-source medication,'' VA proposes to 
use seven exclusionary criteria to limit the medications that would be 
considered as Tier 1 medications entitled to the lowest copayment 
amount of $5. A medication must meet all of these criteria to be 
selected as a Tier 1 medication. These criteria would appear in 
proposed paragraph (b)(2) and its subparagraphs. VA would use these 
criteria not less than once per year to select which medications would 
qualify as Tier 1 medications. This annual (or more frequent) review 
would ensure that VA regularly reviews new medications and changes in 
prescription patterns and patient needs.
    The first five criteria appear in paragraph (b)(2)(i). The first, 
in proposed paragraph (b)(2)(i)(A), would be that VA's acquisition cost 
for the medication must be less than or equal to $10 for a 30-day 
supply of medication. This is an economic criterion designed to limit 
the effects of the proposed rule on VA's overall budget. The $10 amount 
is currently the greatest amount that VA may consider while also 
keeping the cost of the reduced copayment amounts within acceptable 
budgetary limits.
    Second, in proposed paragraph (b)(2)(i)(B), VA would exclude 
topical

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creams, products used to treat musculoskeletal conditions, 
antihistamines, and steroid-containing medications. These classes of 
medications generally are used on an ``as needed'' basis, and the 
quantity dispensed is not uniform for topical creams, lotions, and 
ointments. These medications would be excluded because they are not 
often used to treat chronic conditions, and their inclusion would 
result in a loss of revenue beyond what VA can support within its 
appropriated resources. Finally, excluding medications that are often 
used for short time periods and/or for acute skin infections or 
conditions is consistent with the criterion in proposed paragraph 
(b)(2)(i)(E), below.
    Third, under proposed paragraph (b)(2)(i)(C), we would require that 
the medication be on the VA National Formulary (VANF). The VANF is a 
list of medications approved by VA for VA patients based on 
considerations of safety, quality, effectiveness, and the ability of 
the medications to meet the needs of VA's unique patient population. 
Requiring a medication to be on the VANF ensures that VA has already 
reviewed the medication in terms of its safety, quality, effectiveness, 
and general applicability, thereby ensuring sound clinical care. 
Medications that are not on the VANF are not approved on a national 
level, even if they may have specialized uses and may be appropriate 
for prescribing in individual cases. Non-formulary medications can be 
prescribed by VA when clinically warranted, on a case-by-case basis. 
However, these medications are much less likely to meet VA's goal of 
reaching the largest number of VA patients possible through this 
rulemaking. In addition, a drug may not be included on the VANF because 
we have determined that another medication from the same drug class is 
selected based on clinical effectiveness. Finally, many non-VANF drugs 
are prescribed by VA clinicians to treat conditions with a low 
prevalence among veterans or to treat non-chronic conditions. Requiring 
that the medication be on the VANF is medically appropriate and 
consistent with the purposes of this rulemaking. VA periodically 
revises the medications that appear on the formulary, and to the extent 
it appears that a drug meets the other criteria of this proposed rule, 
and a lower copayment for that drug would serve the clinical objectives 
animating this rulemaking, we would consider adding the drug to the 
VANF.
    Fourth, under proposed paragraph (b)(2)(i)(D), VA would exclude 
antibiotics that primarily are used for short periods of time to treat 
infections. These medications may lead to harmful health outcomes if 
overprescribed, and this exclusion is intended to support clinical 
care. A veteran in need of antibiotics for a short-term illness likely 
only pays a single copayment for this prescription during the course of 
a year. Accordingly, the clinical incentive for patient medication 
adherence over time that VA intends to promote through this rulemaking 
is less relevant for these medications.
    Fifth, under proposed paragraph (b)(2)(i)(E), VA would only 
consider medications that primarily are prescribed to either treat or 
manage a chronic condition, or to reduce the risk of adverse health 
outcomes of secondary conditions that are often more dangerous than the 
chronic condition itself. We believe this is crucial to maximizing the 
clinical benefit under this proposed rule. For example, VA would select 
medications used to treat high blood pressure because they reduce the 
risks of heart attack, stroke, and kidney failure. Some examples of 
chronic conditions prevalent among veterans include hypertension (more 
than 40 percent of enrolled veterans), diabetes (25 percent), and 
various types of heart disease (between 5 and 10 percent). VA 
anticipates that reducing copayments for medications treating these 
conditions would improve health outcomes for veterans by increasing the 
rate of adherence to prescribed medication regimens. VA may also 
benefit from secondary cost savings resulting from improved health 
outcomes and reduced demand for high cost treatments, such as surgery, 
for potentially life-threatening conditions that could have been 
prevented.
    This criterion is also crucial because it serves to focus budgetary 
resources onto drugs used to treat and prevent conditions for which we 
expect the clinical benefits of this proposed rule will be the most 
pronounced. Improving our ability to monitor patients' compliance and 
increased patient compliance with treatment plans would have the most 
dramatic health benefits for veterans who take medications that fall 
within this criterion. It is well established that adherence to 
medications used in the management of chronic diseases such as 
hypertension, diabetes, hyperlipidemia and heart disease slows 
progression of major diseases that result in disability and increased 
consumption of health care resources.
    Further, we propose that conditions that persist for 3 months or 
more will be considered chronic. We are aware that 38 CFR 3.317(a)(4) 
provides that a condition must persist for 6 months before it may be 
considered chronic. However, that section is designed to identify 
conditions that form the basis of a monthly monetary payment of 
compensation, which is a different goal than the treatment of a medical 
condition. Treating a persistent medical condition can be critical in 
preventing additional or worsening symptoms as well as secondary 
illnesses. Moreover, Sec.  3.317(a)(4) of 38 CFR deals with undiagnosed 
illnesses arising out of the comparatively narrow context of the Gulf 
War. When a disease is difficult to diagnose, requiring a longer period 
of persistence helps VA ensure that condition in question actually is 
chronic as that term is commonly understood. We would also apply this 
criterion to conditions, not to individual patients. For example, just 
because it is technically possible for a common cold to persist for 3 
months does not mean that colds are chronic. Rather, conditions which 
typically persist for 3 months in most or all patients would meet this 
criterion. For example, VA would select medications used to treat high 
blood pressure because that condition typically persists for more than 
3 months and, under the proposed rule, we would charge the $5 copayment 
for such medication (as long as it met all other criteria) regardless 
of whether the patient for whom the medication is prescribed has 
actually been diagnosed as having had high blood pressure for 3 months.
    Under the sixth criterion in proposed paragraph (b)(2)(ii), we 
would consider, among those medications that satisfy all of the 
criteria in paragraph (b)(2)(i), those medications that are among the 
top 75 most commonly prescribed multi-source medications based on the 
number of prescriptions issued for a 30-day or less supply on an 
outpatient basis during a fixed period of time to determine our annual 
list of Tier 1 medications. This would enable VA to consider veteran 
utilization when adopting the list. By looking at how many 
prescriptions are filled by veterans, VA can identify those medications 
that are in greatest demand and reduce their copayments, thereby 
providing the greatest benefit to veterans in terms of cost reduction. 
VA clinicians are also most likely to prescribe medications that have 
the greatest clinical benefit to veterans, and as a result, veterans 
are also likely to benefit from improved health care delivery. This 
factor would also ensure that, as the clinical needs of veterans 
change, VA reassesses the list to determine if new drugs should qualify

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or if drugs currently identified as selected should be removed. VA 
proposes to identify up to 75 medications under this paragraph because 
this number would allow VA to identify a broad spectrum of 
pharmaceuticals while limiting the potential budgetary impact of 
reduced copayment collections. VA would review utilization data for a 
fixed period of time, likely a 12-month period either consisting of a 
fiscal year or a calendar year. This requirement would allow VA to 
regularly assess the available data and make any necessary changes.
    After identifying the top multi-source medications prescribed that 
also satisfy the criteria in paragraph (b)(2)(i), VA would evaluate 
these medications to determine their clinical value under the seventh 
criterion, which appears in proposed paragraph (b)(2)(iii), and in the 
context of VA's available budgetary resources, as described in more 
detail below. VA would make a medical determination concerning the 
clinical value of each entry on the list of the most utilized 
medications. New developments, such as a shift in the health care needs 
of the veteran population, newly released data or clinical treatment 
guidelines, or newly released multi-source medications could help VA 
determine which medications should be Tier 1 medications, but the 
possible range of factors are too numerous to be set forth in 
regulation. For example, many veterans have cardiovascular conditions 
that require treatment or management, such as high blood pressure, high 
cholesterol, heart disease, diabetes, and others. VA would take the 
prevalence of these conditions into account when selecting medications 
to ensure that a large number of veterans would be able to receive 
medications at a reduced copayment. As another example, VA would 
consider the recommendations of clinical practice guidelines it follows 
in the treatment of serious, chronic conditions. These clinical 
practice guidelines are developed in consultation with experts in each 
disease and are based on the latest available research in terms of 
efficacy and health outcomes. A medication that is identified as a 
first course of treatment would likely receive preference over a 
medication that is primarily used as second treatment option. In a 
similar way, VA would also look to empirical data on morbidity and 
mortality rates for conditions following treatment with certain 
medications. If one medication does a better job at improving health 
outcomes than another based on these measures, VA would likely select 
that better performing medication. There may be certain medications 
that treat a larger segment of the population than others, and VA would 
likely consider these attributes as well. If one medication is 
particularly effective with a sub-group, but is less effective with the 
average patient, it would be less likely to be selected. Similarly, VA 
may apply public health principles to identify conditions that are 
either under-treated or that, if treated early, can prevent the onset 
of more complex conditions that are more expensive to treat. For 
example, VA may look for medications that treat glaucoma or 
osteoporosis, which have a low prevalence in the veteran population, 
but that if treated and managed early can prevent more serious 
conditions such as blindness or broken bones. Ultimately, these 
determinations would be made by VA using the clinical expertise of its 
physicians, pharmacists, public health specialists, and other 
clinicians as appropriate to ensure that VA is able to offer at a 
reduced copayment the right mix of medications for its patient 
population. This approach is commonly used by other health care plans 
to select medications under their pharmacy benefits programs. As new 
multi-source medications become approved and available, VA would need 
to reassess this list and, as the health profile of its patient 
population changes, VA would need to maintain flexibility to ensure 
that the medications identified for a reduced copayment are 
appropriate.
    The purpose of the criterion of clinical value in paragraph 
(b)(2)(iii) would be to ensure that those medications that would most 
improve clinical care would be available at a reduced copayment; 
however, we note that this evaluation should not be read to suggest 
that other multi-source mediations do not have clinical value. The Tier 
1 and Tier 2 classifications are designed simply to distinguish between 
two similar classes of medications and do not reflect on the quality of 
the medication itself. VA would make determinations regarding which 
medications should be included in Tier 1 in light of available 
budgetary resources to ensure that it does not select more medications 
than it can afford to maintain at a reduced copayment amount.
    The decision regarding which medications qualify for Tier 1 would 
also be made in the context of VA's available budgetary resources, as 
noted in proposed paragraph (b)(2)(iii). Each year, VA assembles a 
budget request that is carefully calculated based on its enrolled 
patient population, their clinical needs, and the cost of delivering 
health care. Included in VA's budget projections is an estimate for how 
much VA will receive from first- and third-party payers for certain 
types of treatment. These payments are deposited into the Medical Care 
Collections Fund (MCCF). Medication copayments are one source of 
revenue for the MCCF. In each year's budget recommendation submitted by 
VA, we identify the MCCF estimates, and in each budget enacted by 
Congress, the MCCF estimates are also included. VA's budget for the 
Medical Services, Medical Support and Compliance, and Medical 
Facilities accounts are appropriated in advance under 38 U.S.C. 117, so 
VA knows in one year what resources it will have in the following year. 
VA would use these figures to determine how it can enhance the value of 
the pharmacy portion of the medical benefits package by offering the 
maximum number of Tier 1 medications while maintaining the established 
budget parameters. VA does not anticipate dramatic changes in the 
numbers or types of medications that are available for a Tier 1 reduced 
copayment from year to year.
    VA is aware that as a result of using these proposed criteria, some 
veterans who have conditions that are very serious but not very common 
may receive no Tier 1 medication copayment reduction under the proposed 
rule. Whether a particular veteran realizes reduced medication 
expenditures in a given year would depend on the medications VA selects 
for a reduced copayment amount and the medications prescribed to that 
veteran. However, as explained above, the purpose of this rule is to 
improve clinical outcomes for a large number of veterans while 
maintaining a responsible budget. VA does not expect that veterans' 
obligations for copayments would increase by a notable amount, and any 
increases resulting from this rule would be less than they would have 
been over time with the current regulations.
    VA would also modify Sec.  17.110(b)(3) to state that VA would 
publish a list of Tier 1 medications not less than once per year in the 
Federal Register and on VA's Web site at www.va.gov/health. The current 
paragraph (b)(3) requires VA to publish and distribute information on 
copayment amounts, but as these amounts would be established in 
regulation, there would be no need to continue that practice. VA 
expects it would publish a list of Tier 1 medications only once per 
year, but there may be situations when a change during the year would 
be justified. For example, if a medication that VA has

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identified as a Tier 1 medication is removed from the market or if 
significant safety concerns are raised with its use, VA physicians and 
pharmacists would likely shift patients to a different multi-source 
medication to treat the same conditions. In this scenario, VA may elect 
to designate this alternative medication as a Tier 1 medication so that 
a large number of veterans do not experience a mid-year increase in the 
cost of filling their medications as a result of events outside their 
control.
    VA has published a list of medications that it would classify as 
Tier 1 medications on its Web site, www.va.gov/health. This list was 
compiled using the process described above to show what medications 
would be placed in Tier 1 if the proposed rule were effective today, 
and as such, this list is intended to be demonstrative only. We expect 
the list of Tier 1 medications to change before January 1, 2017, as new 
medications become available, prices vary for different for 
medications, and new clinical evidence is published showing the 
efficacy of different medications. If the proposed rule is finalized 
and takes effect prior to January 1, 2017, VA will publish an updated 
list showing those medications that will be placed in Tier 1 for 
purposes of copayments starting on January 1, 2017.
    VA would further modify Sec.  17.110(b) by moving the discussion of 
the copayment cap from current paragraph (b)(2) to a new paragraph 
(b)(5). VA would amend this provision, which establishes a current rate 
and a methodology for increasing that rate, and replace it with a 
single rate that could only be changed through subsequent rulemaking. 
VA proposes to establish a fixed copayment cap of $700 in a calendar 
year for all enrolled veterans. VA is extending application of the 
copayment cap to include veterans in priority groups 7 and 8. A typical 
veteran fills two to three prescriptions per month, and at the current 
copayment rates, a veteran must fill 10 prescriptions per month each 
month of the year to hit the copayment cap. Presently, less than three 
percent of all veterans realize savings as a result of the copayment 
cap. With a copayment cap of $700, veterans filling six to eight 
prescriptions per month would likely reach the cap over a calendar 
year. Reducing the copayment cap would also provide a unique benefit to 
veterans who exclusively use Tier 3 medications, as their total annual 
expenses would be no more than $700, whereas under the current 
regulations, they would be $960 or more. We estimate approximately nine 
percent of veterans subject to a copayment would benefit from a $700 
copayment cap. If, in the future, VA engaged in further rulemaking to 
raise the copayment rates from those proposed in this rule, it could 
also then consider whether to raise the copayment cap.
    VA would also make a formatting revision to paragraph (b)(4), 
titling this section ``Veterans Choice Program,'' to maintain 
consistency with other paragraph headings. This would result in no 
formal or substantive change to the copayment rule articulated in this 
paragraph for the Veterans Choice Program, authorized by 38 CFR 
17.1500-17.1540.

Effect of Rulemaking

    The Code of Federal Regulations, if revised as proposed by this 
rulemaking, would represent the exclusive legal authority on this 
subject. No contrary rules or procedures would be authorized. All VA 
guidance would be read to conform with this rulemaking once made final, 
if possible or, if not possible, such guidance would be superseded by 
this rulemaking.

Paperwork Reduction Act

    This proposed rule contains no provisions constituting a collection 
of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' requiring review by the Office of 
Management and Budget (OMB), as ``any regulatory action that is likely 
to result in a rule that may: (1) Have an annual effect on the economy 
of $100 million or more or adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined that it is an economically significant regulatory 
action under Executive Order 12866.

Regulatory Impact Analysis Summary Statement

    This rulemaking proposes to amend its regulations concerning 
copayments and the copayment cap charged to certain Veterans for 
medications required on an outpatient basis to treat non-service 
connected conditions. In addition, this rule would eliminate the 
formula used to calculate future rate increases and change the 
copayment amount beginning January 1, 2017, to $5 for a 30-day supply 
of Tier 1 medications, to $8 for a 30-day supply of Tier 2 medications, 
and $11 for a 30-day supply of Tier 3 medications. The Tiers of 
medications would be defined in regulation, but generally would reflect 
selected multi-source medications (Tier 1), other multi-source 
medications (Tier 2), and single source medications (Tier 3), with 
certain exceptions.
    Based on a comparison of the current and proposed copayment 
amounts, we anticipate that most veterans would realize between a 10 
and 50 percent reduction in their overall pharmacy copayment liability 
each year based on historic utilization patterns. By our estimates, 94 
percent of copayment eligible veterans would experience no cost 
increase, and 80 percent would realize a savings of between $1 and $5 
per 30-day equivalent of medications. The proposed copayment amounts 
are intended to support patient adherence, reduce instances of veterans 
not filling prescription medications and assisting veteran health 
improvements from chronic disease. Table 1 above, shows how copayments 
would vary for veterans and different types of medications. Annual 
savings would be even greater for veterans with a large number of 
medication copayments. VA estimates that at least 50 percent of all 
billable prescriptions would be in Tier 1, with no more than 35 percent 
in Tier 2, and approximately 15 percent in Tier 3. Exact estimates for 
Tier 1 and Tier 2

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are not possible at this time and would depend on the final list of 
medications selected for Tier 1.
    VA anticipates the implementation of a tiered copayment plan in 
CY2017 would reduce First Party Pharmacy copayment revenue from current 
budget levels for Veterans in PGs 2 through 8 who are required to make 
a copayment for certain medications. VA's regulatory impact analysis 
can be found as a supporting document at https://www.regulations.gov, 
usually within 48 hours after the rulemaking document is published. 
Additionally, a copy of the rulemaking and its impact analysis are 
available on VA's Web site at https://www.va.gov/orpm/, by following the 
link for ``VA Regulations Published From FY 2004 Through Fiscal Year to 
Date.''

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (5 
U.S.C. 601-612). This proposed rule would generally be small business 
neutral. The rule would not affect pharmaceutical manufacturers, as it 
does not change the amount VA pays for medications to supply its 
pharmaceutical benefits program, only the amount VA collects from 
veterans as copayments. To the extent there are effects on 
pharmaceutical companies, we believe it would most likely have a 
positive affect if VA is purchasing more medications and supplies from 
them. Similarly, VA does not believe that this rule would have a 
significant economic impact on small pharmacies. It is possible that 
some veterans would choose to fill their prescriptions within VA rather 
than from a community pharmacist, but we anticipate such a shift would 
not result in a significant economic impact on a substantial number of 
such entities. Therefore, under 5 U.S.C. 605(b), this rulemaking would 
be exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

Congressional Review Act

    This proposed rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can 
take effect, the Federal agency promulgating the rule shall submit to 
each House of the Congress and to the Comptroller General a report 
containing a copy of the rule along with other specified information, 
and has been submitted to Congress and the Comptroller General for 
review.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.007, Blind Rehabilitation 
Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical 
Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans 
Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans 
Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, 
Veterans State Nursing Home Care; 64.019, Veterans Rehabilitation 
Alcohol and Drug Dependence; and 64.022, Veterans Home Based Primary 
Care.
Signing Authority
    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Robert L. 
Nabors II, Chief of Staff, Department of Veterans Affairs, approved 
this document on September 1, 2015, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs--health, Grant programs--Veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Dated: December 29, 2015.
William F. Russo,
Director, Office of Regulation Policy & Management, Office of the 
General Counsel, Department of Veterans Affairs.

    For the reasons set out in the preamble, VA proposes to amend 38 
CFR part 17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, and as noted in specific sections.

0
2. Amend Sec.  17.110 by:
0
a. Revising paragraph (a).
0
b. Revising paragraphs (b)(1)(i) through (iii).
0
c. Adding paragraph (b)(1)(iv).
0
d. Revising paragraphs (b)(2) and (3).
0
e. Adding a heading to paragraph (b)(4).
0
f. Adding paragraph (b)(5).
    The revisions and additions read as follows:


Sec.  17.110  Copayments for medications.

    (a) General. This section sets forth requirements regarding 
copayments for medications provided to veterans by VA. For purposes of 
this section, the term ``medication'' means prescription and over-the-
counter medications, as determined by the Food and Drug Administration 
(FDA).
    (b) * * *
    (1) * * *
    (i) For a 30-day or less supply of Tier 1 medications, the 
copayment amount is $5.
    (ii) For a 30-day or less supply of Tier 2 medications, the 
copayment amount is $8.
    (iii) For a 30-day or less supply of Tier 3 medications, the 
copayment amount is $11.
    (iv) For purposes of this section:
    (A) Multi-source medication is any one of the following:
    (1) A medication that has been and remains approved by the FDA--
    (i) Under sections 505(b)(2) or 505(j) of the Food, Drug, and 
Cosmetic Act (FDCA, 21 U.S.C. 355), and that has been granted an A-
rating in the current version of the FDA's Approved Drug Products with 
Therapeutic Equivalence Evaluations (the Orange Book); or
    (ii) Under section 351(k) of the Public Health Service Act (PHSA, 
42 U.S.C. 262), and that has been granted an I or B rating in the 
current version of the FDA's Lists of Licensed Biological Products with 
Reference Product Exclusivity and Biosimilarity or Interchangeability 
Evaluations (the Purple Book).

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    (2) A medication that--
    (i) Has been and remains approved by the FDA pursuant to FDCA 
section 505(b)(1) or PHSA section 351(a);
    (ii) Which is referenced by at least one FDA-approved product that 
meets the criteria of paragraph (b)(1)(iv)(A)(1) of this section; and
    (iii) Which is covered by a contracting strategy in place with 
pricing such that it is lower in cost than other generic sources.
    (3) A medication that--
    (i) Has been and remains approved by the FDA pursuant to FDCA 
section 505(b)(1) or PHSA section 351(a); and
    (ii) Has the same active ingredient or active ingredients, works in 
the same way and in a comparable amount of time, and is determined by 
VA to be substitutable for another medication that has been and remains 
approved by the FDA pursuant to FDCA section 505(b)(1) or PHSA section 
351(a). This may include but is not limited to insulin and 
levothyroxine.
    (4) A listed drug, as defined in 21 CFR 314.3, that has been 
approved under FDCA section 505(c) and is marketed, sold, or 
distributed directly or indirectly to retail class of trade with either 
labeling, packaging (other than repackaging as the listed drug in 
blister packs, unit doses, or similar packaging for use in 
institutions), product code, labeler code, trade name, or trademark 
that differs from that of the listed drug.
    (B) Tier 1 medication means a multi-source medication that has been 
identified using the process described in paragraph (b)(2) of this 
section.
    (C) Tier 2 medication means a multi-source medication that is not 
identified using the process described in paragraph (b)(2) of this 
section.
    (D) Tier 3 medication means a medication approved by the FDA under 
a New Drug Application (NDA) or a biological product approved by the 
FDA pursuant to a biologics license agreement (BLA) that retains its 
patent protection and exclusivity and is not a multi-source medication 
identified in paragraph (b)(1)(iv)(A)(3) of this section.
    (2) Determining Tier 1 medications. Not less than once per year, VA 
will identify a subset of multi-source medications as Tier 1 
medications using the criteria below. Only medications that meet all of 
the criteria in paragraphs (b)(2)(i), (ii), and (iii) of this section 
will be eligible to be considered Tier 1 medications, and only those 
medications that meet all of the criteria in paragraph (b)(2)(i) of 
this section will be assessed using the criteria in paragraphs 
(b)(2)(ii) and (iii).
    (i) A medication must meet all of the following criteria:
    (A) The VA acquisition cost for the medication is less than or 
equal to $10 for a 30-day supply of medication;
    (B) The medication is not a topical cream, a product used to treat 
musculoskeletal conditions, an antihistamine, or a steroid-containing 
medication;
    (C) The medication is available on the VA National Formulary;
    (D) The medication is not an antibiotic that is primarily used for 
short periods of time to treat infections; and
    (E) The medication primarily is used to either treat or manage a 
chronic condition, or to reduce the risk of adverse health outcomes 
secondary to the chronic condition, for example, medications used to 
treat high blood pressure to reduce the risks of heart attack, stroke, 
and kidney failure. For purposes of this section, conditions that 
typically are known to persist for 3 months or more will be considered 
chronic.
    (ii) The medication must be among the top 75 most commonly 
prescribed multi-source medications that meet the criteria in paragraph 
(b)(2)(i) of this section, based on the number of prescriptions issued 
for a 30-day or less supply on an outpatient basis during a fixed 
period of time.
    (iii) VA must determine that the medication identified provides 
maximum clinical value consistent with budgetary resources.
    (3) Information on Tier 1 medications. Not less than once per year, 
VA will publish a list of Tier 1 medications in the Federal Register 
and on VA's Web site at www.va.gov/health.
    (4) Veterans Choice Program. * * *
* * * * *
    (5) Copayment cap. The total amount of copayments in a calendar 
year for an enrolled veteran will not exceed $700.
* * * * *
[FR Doc. 2015-33052 Filed 1-4-16; 8:45 am]
 BILLING CODE 8320-01-P