Assessment of formulary development in a small hospital

The development of a formulary system in a 138 bed hospital is evaluated. A description of the process used in completing the formulary is provided as well as the assertion that the small hospital has advantages in initiating this process. The results of the study show a 40% decrease in the number of drug line items and a $14,901 (36%) reduction in inventory. Improvement in departmental organization is noted as well as a positive psychological impact. As the prospective payment system increases the need to control costs and improve efficiency, the formulary system is seen as an important step in addressing these concerns.