Drug formularies--good or evil? A view from a managed care provider

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.