Formulary

A formulary can refer to an insurance formulary or a hospital formulary. A formulary in insurance terms is the list of prescription drugs that an insurance plan or prescription drug plan covers in its benefits. The drugs included in the formulary will usually determine what drugs a patient can be prescribed unless they want to pay fully out of pocket. A formulary list is created by each individual payer, whether public or private, and periodically changes in response to new evidence, a drug becoming generic, a newly approved drug and similar events. The drugs in a formulary are usually grouped into tiers, often based largely on cost, that separate generics from brand-name drugs from boutique or specialty drugs. The drugs included in these tiers will also vary from one payer’s formulary to another.

A hospital formulary refers to the list of drugs available in that hospital that physicians have access to, often organized according to which medications are preferred first and then subsequently for particular conditions or clinical situations. The choice of what to include in a hospital formulary reflects clinical judgment of the most effective medications necessary to have available for all conditions regularly treated in that hospital.