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Drug formularies--good or evil? A view from a managed care provider
1WellPoint Pharmacy Management Inc., Calabasas Hills, Calif. 91301, USA.
Cardiology
|January 1, 1994
Summary
Formularies help manage pharmaceutical costs and utilization, especially with an aging population and rising drug prices. Effective formulary management ensures drug therapy needs for most patients while controlling expenses and maintaining quality care.
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Clinical Pharmacy
Background:
- Rising healthcare costs and an aging population increase pharmaceutical utilization and expenses.
- Inflation in drug acquisition costs and new pharmaceutical technologies necessitate cost-control measures.
- Formularies are crucial tools for managing drug therapy and associated expenditures.
Purpose of the Study:
- To discuss the advantages, development, administration, and management of formularies.
- To highlight the role of formularies in controlling pharmaceutical costs.
- To emphasize the importance of formularies in providing quality patient care.
Main Methods:
- Review of factors driving pharmaceutical utilization and costs.
- Analysis of different formulary management types (open, closed, incentive-based, patient-driven).
- Discussion of collaborative efforts required for effective formulary performance.
Main Results:
- Well-researched formularies can meet the drug therapy needs of 85-90% of the population.
- Formularies provide a mechanism for cost control while ensuring quality care.
- Different formulary models offer varying levels of flexibility and cost-sharing.
Conclusions:
- Formularies are essential for managing pharmaceutical costs and utilization.
- Effective formulary implementation requires collaboration among pharmacists, payers, physicians, industry, and patients.
- Clinically based formularies balance cost containment with the provision of quality healthcare services.