Hydery and Reddy (2024) provides a good introduction to medication formularies. Below is a quick overview.
What is a form?
TO form is a continually updated list of medicines, products and technologies supported by current evidence-based medicine, as well as the judgment of physicians, pharmacists and other relevant experts in the diagnosis and treatment of diseases and the preservation of health. Formularies generally share the overall goal of providing access to appropriate therapy while promoting effective resource utilization, allowing the managed care pharmacy organization to operate sustainably.
What types of form structures exist?
- Closed forms These are forms where the excluded products are not covered.
- Open forms provide coverage for all available products; however, the tradeoff is increased costs to the payer and potentially the member.
- Tiered formspatient out of pocket costs It will depend on the level at which a specific product is categorized. Therefore, patients are incentivized to use lower tier medications through a lower tier. copay.
- Value-based forms evaluate product value primarily through cost-effectiveness analysis, assigning products with a high evaluated value (low incremental cost-effectiveness ratio) to lower copayments and products with a low evaluated value (high incremental cost-effectiveness ratio) to higher copays.
What considerations do payers take into account when developing a formulary?
What are the key trends to consider in form development?
Some key issues include the increase in approval and launch of biosimilars, digital prescription therapies, and the growing emphasis on health equity.
