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Management of Drug Formulary. Dimitry Gotlinsky Western University Managed Care Clerkship ProPharma Pharmaceutical Consultants, Inc. 06/16/06. Drug Formulary. A drug formulary is a preferred list of medications developed by health care professionals

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management of drug formulary

Management of Drug Formulary

Dimitry Gotlinsky

Western University

Managed Care Clerkship

ProPharma Pharmaceutical Consultants, Inc.


drug formulary
Drug Formulary
  • A drug formulary is a preferred list of medications developed by health care professionals
  • Promotes high quality medical care that is affordable for patients
  • Features a continually revised list of prescription medications
the formulary system
The Formulary System
  • Provides drug product selection and formulary maintenance
  • Drug utilization review
  • Periodic evaluation and analysis of treatment protocols and procedures
  • Monitoring, reporting, and analysis of adverse results of drug therapy
techniques of formulary system management
Techniques of Formulary System Management
  • 3 general categories

a) Drug use evaluation

b) Formulary maintenance

c) Drug product selection

drug use evaluation
Drug Use Evaluation
  • Diagnosis criteria
  • Prescriber criteria
  • Drug-specific criteria
formulary maintenance
Formulary Maintenance
  • Therapeutic drug class review
  • Formulary addition or deletion
  • Use of non-formulary drugs
drug product selection
Drug Product Selection
  • Generic substitution
  • Therapeutic Interchange
how are formularies chosen
How are Formularies Chosen?
  • Not all drugs are created equal
  • Safety and efficacy are the 2 most important aspects of choosing a formulary
  • Based on recommendations of Pharmacy & Therapeutics Committee
members of p t committee
Members of P & T Committee
  • Physicians
  • Pharmacists
  • Nurses
  • Administrators
  • Quality assurance coordinators
  • Epidemiologists/specialists
  • Ethicists
p t committee duties
P & T Committee Duties
  • Appraises, evaluates, and selects drugs for the formulary
  • Meets as frequently as is necessary to review and update the formulary
  • Oversees quality improvement programs that employ drug use evaluation
  • Implement generic substitution and therapeutic interchange
  • Develops protocols and procedures for the use of non-formulary drugs
types of formularies
Types of Formularies
  • Open

-greatest level of flexibility

- typically 2-tiered benefit design

  • Multi-tier

-provides for a high level of flexibility

-most of the time utilizes 3-tier benefit design, but can


  • Closed

-least level of flexibility

-involves use of NDC blocks and prior authorizations

cost of medications
Cost of Medications
  • Cost is just one of many factors that plays a role
  • Basing formulary system decisions on cost factors is secondary
  • First priority is to establish safety, efficacy, and therapeutic need
  • Lower cost drug for the same condition does not get automatically picked
non formularies
  • The formulary system should:

a) enable individual patients needs to be met with non-formulary drug products

b) provide access to a formal appeal process if a request for a non-formulary drug is denied

c) institute an efficient process for the timely obtaining of non-formulary drug products

d) include policies that state that practitioners should not be penalized for prescribing non-formulary drugs

good formulary system
Good Formulary System
  • Informative
  • Proactively inform practitioners about changes to the formulary
  • Disclose the existence of formularies
  • Provide rationale for specific formulary decisions when requested
  • Provide patient education programs
  • Health care systems frequently conduct formulary decision-making under uncertain conditions
  • Needed a standardized approach to support product evaluation and selection with clinical outcomes as the most important consideration
  • Approved a set of guidelines for MCOs to use when considering drugs for inclusion in formularies
amcp format
AMCP Format
  • Allow a health system and its P&T committee to determine:

a) clinical benefits

b) risks

c) evaluate value

d) determine overall cost consequences

to their health system

amcp guideline goals
AMCP Guideline Goals
  • Establish a comprehensive, standardized, evidence-based process for evaluation of clinical and economic data
  • Provide manufacturers with a consistent format for providing necessary information
  • Improve the timeliness, quality and relevance of information available to P&T committees
amcp dossier content
AMCP “Dossier” Content
  • Approved and off-label indications
  • PK and PD
  • Dose and Duration
  • Safety Information
  • Key economic study results
  • Economic evaluation support data
  • Demographics
in conclusion
In Conclusion
  • American public is unwilling to accept limits on the use of health care services
  • Major factor contributing to resistance of cost-effectiveness analysis
  • AMCP format will help health systems establish a rational evidence-based decision making
  • As a result will gain the confidence and trust of patients as well as clinicians, payers and members