AMCP supports the use of evidence-based formularies, or drug lists, to encourage the use of safe, effective, and affordable medications that meet the needs of the patient population and assist members of the health care team in effectively managing a patient's medication regimen. The value of a formulary is maximized when integrated with other health care management programs, such as utilization management (UM). Like the formulary, UM tools such as prior authorization, step therapy, quantity limits, and drug utilization review (DUR) are based on clinical evidence and are intended to promote safe, effective, and appropriate medication use.
AMCP recognizes the key role of pharmacists in the formulary and UM processes. Pharmacists drive the P&T Committee agenda through the analysis and dissemination of scientific, clinical, and health economic information for P&T Committee member review; follow-up with research when necessary; and communicate P&T Committee decisions to stakeholders including payers, providers, and patients. Pharmacists work collaboratively on the development and operationalization of UM strategies in accordance with regulatory and other applicable requirements. The overall formulary system encourages collaboration among healthcare providers to ensure positive patient outcomes and cost-effective results.
Utilization Management (UM), or Utilization Review (UR), has remained a mainstay in cost management for payment models and healthcare delivery. Utilization management approaches are interventions with healthcare professionals. Prior authorization or pre-authorization is the type of utilization management that occurs before clinical care. The utilization management during clinical care for a patient who is inpatient or admitted to a facility is called a concurrent review. Lastly, utilization management, done after the clinical encounter, is called retrospective review. Utilization management tools like prior authorization, concurrent reviews, and retrospective reviews are all tools to ensure that the right medication is administered therapeutically to the right patient, so refining utilization management protocols to streamline approvals and enhance efficiency is essential.1
Formularies are used by managed care pharmacy organizations (MCOs) to manage costs and improve patient access, creating healthier lives for patients by improving overall health outcomes. The goal of formularies set up by MCOs is to provide patients access to appropriate therapies while promoting effective resource utilization. Traditional formulary strategies include open, closed, value-based, and tiered formularies. The development process for a formulary is primarily driven by the pharmacy and therapeutics (P&T) committee and a value committee within an organization. MCOs may also work with pharmacy benefit managers (PBMs) to develop template formularies.
A Pharmacy and Therapeutics (P&T) committee is pertinent in healthcare as they are essential in optimizing medication utilization and access. The committee evaluates evidence-based research centered around the safety, efficacy, and cost-effectiveness of treatments to inform formulary decisions. With the ever-evolving healthcare landscape and rising drug costs, healthcare professionals should stay current on the new treatments in the marketplace.3
Utilization management programs address any complications related to overutilization—excessive use of services that result in waste without measurable improvements in quality. These inefficiencies can lead to increased costs for both patients and payers and can ultimately restrict access to care. UM strategies play a critical role in mitigating these challenges and improving affordability and access.1
Formularies continue to evolve with the introduction of new and often costly therapies, such as biosimilars and prescription digital therapeutics (PDTs). While biosimilars have shown potential for cost-effectiveness, their adoption remains slow. Efforts to improve adoption rates and create clear pathways for PDT coverage are ongoing. Furthermore, formulary decisions increasingly account for health equity by considering social determinants such as race, language, geography, and socioeconomic status.2
P&T committee decisions significantly impact patient outcomes by guiding the appropriate selection and management of medications. The committee’s evaluations help strike a balance between effective treatments and cost control, supporting sustainable care models within managed care settings.3
AMCP offers a wide variety of educational opportunities, from events and webinars to online training.
