Drug formularies are pre-approved lists of drugs that aim to provide high-quality, cost-effective care for the patient. Formularies vary between different insurance plans and affect drug coverage and what each drug costs. This financial incentive encourages prescribers to use the most effective drug at the lowest cost. Health plans most often contract with a pharmacy benefit manager (PBM), who acts as the middleman between pharmaceutical manufacturers and pharmacies, to help create the drug formulary. A Pharmacy and Therapeutics Committee is responsible for the formulary design. This committee, composed of pharmacists and doctors, decides on various utilization protocols such as prior authorization criteria, mail-order eligibility, and coverage restrictions.
If you frequently access medications for a health condition, it is important to educate yourself on the drug formulary for your insurance plans to empower your decision-making.
Currently, prescription drug coverage is an essential health benefit under the Affordable Care Act and must be included in all individual and small-group health plans. However, at the end of the day, it is important to carefully consider your plan’s formulary and choose the plan that covers your medications.
Learn More:
Understanding Your Health Plan Drug Formulary | Verywell Health
A Consumer Guide to Drug Formularies: Understanding the Fundamentals of Behavioral Health Medications | Parity Track
Filing a Formulary Exception | Patient Advocate Foundation
Last Reviewed June 17th, 2024