Formulary Design

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The use of drug formularies enables payers, providers, and PBMs to promote clinically sound, cost-effective medication therapy options and positive therapeutic outcomes. To create and manage formularies, payers and PBMs rely on panels of experts called Pharmacy and Therapeutics (P&T) Committees. These committees, made up of physicians, pharmacists, and other health care providers, evaluate clinical and medical literature to select the most appropriate medications for individual disease states and conditions.

A number of cost-saving elements are then factored in, such as formulary tiers and step therapy, to encourage the most clinically-appropriate and economically-sound therapies. The effective use of formularies can minimize overall medical costs, improve patient access to more affordable care, and provide patients with an improved quality of life.

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What is a specialty drug?

Specialty drugs are best defined by the full range of each product’s attributes, rather than solely by cost and route of administration.

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What services do specialty pharmacies provide?

Specialty pharmacy services are designed for a small, but growing population of patients with relatively complex and chronic diseases that require expensive and challenging drug regimens.

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What is a PBM?

These drugs are best defined by the full range of each product's attributes, rather than solely by cost and route of administration.

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What is a formulary?

A formulary is a continually updated list of prescription drugs approved for reimbursement by the PBM’s payer client.

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