Impact of formularies on clinical innovation

It is important to consider, in light of how innovation has so often occurred, whether today's managed care environment is conducive to continued psychopharmacologic innovation. The initial step in the development of a new area in psychopharmacology has historically relied in large part on individual clinicians who pursued unconventional methods of treatment. When a set of guidelines such as a formulary (a list of drugs eligible for reimbursement compiled by a managed care organization) becomes restrictive, it decreases clinician innovation. In addition to this long-term threat to innovation, studies have found greater restrictiveness in formularies to be associated with higher health care utilization. Thus, restricted formularies that are based on a naive interpretation of "therapeutic equivalence" may slow the advance of medical science without even achieving the only goal that could possibly justify such restrictions-cost control. If innovation is to flourish, formularies must be flexible and advisory, not restrictive. Preserving the climate for innovation in health care requires the management culture to focus on the long-term impact of policies on quality and innovation as well as on the overall health cost in the system.