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Formulary – List of The Prescription Drugs Definition
A list of the prescription drugs a health plan or insurance company, including state and federal health insurance programs, will cover. Typically a committee of physicians and pharmacists makes the determinations about what drugs appear in the formulary and why. Factors for consideration include
- The drug’s efficacy
- Whether generic products are available
- Similarity to other drugs that are less expensive or have fewer side effects
- Narrow therapeutic index (nti) status
- The need for the drug within the insurer’s patient population
- Whether over-the-counter forms of the drug are available
- The drug’s approved uses
Most insurers update their formularies at least annually. An insurer may pay a smaller percentage of the cost for a nonformulary drug or may choose not to cover (pay for) nonformulary drugs at all except within the parameters of specifically defined criteria. A doctor may prescribe a drug that is not on the formulary even though the insurer may refuse to pay for it.
The person may still receive the drug by paying for the prescription. Drug formularies help establish consistent prescribing practices as well as control costs for the insurer.
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