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Formulary: what it is and how it works
1Pharmacy Gold, Inc, St. Paul, MN, USA.
Journal of Healthcare Resource Management
|August 5, 1996
Summary
Pharmacy benefit managers (PBMs) are expanding services, including formulary management, to control rising healthcare costs. This article explains drug formularies and their function in managed care environments.
Area of Science:
- Health Economics
- Pharmacy Management
- Managed Care
Background:
- Healthcare expenditures in the US exceed $900 billion, with drug spending significant.
- Managed care environments demonstrate slower cost increases compared to fee-for-service models.
- Pharmacy benefit management (PBM) services are increasingly sought by employers to manage drug costs.
Purpose of the Study:
- To explain the concept and function of a drug formulary.
- To highlight the role of PBMs in managing outpatient drug benefits.
- To discuss the expansion of managed care and PBM services.
Main Methods:
- The article discusses the services offered by PBMs.
- It focuses on formulary management as a key PBM service.
- The explanation of drug formularies and their operational mechanisms is detailed.
Main Results:
- Pharmacy benefit management (PBM) services are expanding due to rising healthcare costs.
- Outpatient drug benefits are increasingly separated from general medical benefits.
- PBMs offer services like pharmacy networks, disease management, and formulary development.
Conclusions:
- Drug formularies are a central component of formulary management.
- PBMs play a crucial role in controlling drug expenditures within managed care.
- The integration of PBM services is a growing trend in healthcare benefit management.