A primer on formulary structures and strategies

Formularies are a tool for managing costs, optimizing patient access, and improving overall health outcomes. The general goal of formularies is to provide access to appropriate therapy while promoting effective resource utilization, which allows the managed care pharmacy organization to operate sustainably. Traditional formulary strategies have included open and closed formularies as well as tiered formularies. However, other formulary structures have emerged in support of the focus on product value. The formulary development process is primarily driven by the pharmacy and therapeutics (P&T) committee and value committee within an organization. Key considerations such as member population, regional differences, regulatory/compliance implications, and benefit design strategies may influence payers to create a customized formulary to provide additional value to their members while managing costs. With the rise of high-cost and specialty products, formularies continue to serve as an important tool for managed care pharmacy organizations. Ongoing trends, such as biosimilars, prescription digital therapeutics, and addressing health equity, will shape future strategy and management of formularies.