Variation in Use of High-Cost Diabetes Mellitus Medications in the VA Healthcare System

The Department of Veterans Affairs (VA), the largest integrated health care system in the United States, may serve as a model of efficient use of prescription drugs. It consistently ranks among the top of all US health care systems in objective ratings of quality of care for chronic diseases,¹ and it does so with low medication costs. The VA negotiates steep price discounts with pharmaceutical manufacturers and engages in robust formulary management using a national formulary. This centralized approach to pharmacy benefit management stands in stark contrast to Medicare Part D, which contracts with over 1000 private plans, each with its own formulary, and which has substantial regional variation in per capita drug spending.² Even within a tightly managed system such as the VA, however, there may also be significant variation across facilities in medication use and spending. We examined national VA data for over 1 million outpatients with diabetes mellitus (DM) to understand how prescribing of high-cost medications varies across facilities.