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Principles of a Sound Drug Formulary System

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Principles of a Sound Drug Formulary System Formulary Management–Endorsed Document 231 Principles of a Sound Drug Formulary System These principles have been endorsed by the following appropriate and cost-effective to best serve the health inter- organizations: ests of a given patient population. • Academy of Managed Care Pharmacy Drug Formulary. A continually updated list of medications • Alliance of Community Health Plans and related information, representing the clinical judgement • American Medical Association of physicians, pharmacists, and other experts in the diagno- • American Society of Health-System Pharmacists sis and/or treatment of disease and promotion of health. • Department of Veterans Affairs, Pharmacy Benefits Management Strategic Healthcare Group Guiding Principles • National Business Coalition on Health U.S. Pharmacopeia • Formulary system decisions are based on scientific and economic considerations that achieve appropriate, safe, and Preamble cost-effective drug therapy. A coalition of national organizations representing health • Clinical decisions are based on the strength of scien- care professionals, government, and business leaders tific evidence and standards of practice that include, formed a working group (see Appendix III) to develop but are not limited, to the following: a set of principles specifying the essential components • Assessing peer-reviewed medical literature, in- that contribute to a sound drug formulary system. The cluding randomized clinical trials (especially Coalition was formed in September 1999 in response to drug comparison studies), pharmacoeconomic the widespread use of drug formularies in both inpatient studies, and outcomes research data. and outpatient settings and the lack of understanding about • Employing published practice guidelines, devel- formularies among the public. Also, proposed federal leg- oped by an acceptable evidence-based process. islation that would provide a prescription drug benefit for • Comparing the efficacy as well as the type and Medicare beneficiaries has brought increased attention to frequency of side effects and potential drug in- the appropriate role and management of drug formulary teractions among alternative drug products. systems within drug benefit programs. • Assessing the likely impact of a drug product on The formulary system, when properly designed and im- patient compliance when compared to alterna- plemented, can promote rational, clinically appropriate, safe, tive products. and cost-effective drug therapy. The Coalition has enumerated • Basing formulary system decisions on a thor- these principles, however, because it recognizes that patient care ough evaluation of the benefits, risks, and po- may be compromised if a formulary system is not optimally de- tential outcomes for patients; risks encompass veloped, organized, and administered. This document contains adverse drug events (adverse drug reactions and “Guiding Principles” that the Coalition believes must be present medication errors, such as those caused by con- for a drug formulary system to appropriately serve the patients it fusing product names or labels). covers. The absence of one or more of these “Guiding Principles” • Economic considerations include, but are not limited, should be cause for careful scrutiny of a formulary system. A glos- to the following: sary (see Appendix I) and bibliography (see Appendix II) are • Basing formulary system decisions on cost fac- included with the “Guiding Principles” to clarify terminology tors only after the safety, efficacy, and therapeu- and to provide additional resources, respectively. tic need have been established. The Coalition believes that the presence of consensus- • Evaluating drug products and therapies in terms based Formulary System Principles can assist decision-mak- of their impact on total health care costs. ers who must balance the health care quality and cost equation. • Permitting financial incentives only when they Further, the Guiding Principles will be a valuable educational promote cost management as part of the deliv- tool for national, state, and local public policy makers, health ery of quality medical care. Financial incen- care system administrators, purchasers and third-party payers, tives or pressures on practitioners that may in- practitioners, and consumers and patient advocates. These terfere with the delivery of medically necessary parties all have an interest in designing formulary systems that care are unacceptable. ensure patients have access to rational, clinically appropriate, safe, and cost-effective therapy and which supports an afford- The formulary system encompasses drug selection, drug utili- able and sustainable drug benefit program. zation review, and other tools to foster best practices in prescrib- ing, dispensing, administration, and monitoring of outcomes. Definitions • The formulary system: Drug Formulary System. An ongoing process whereby • Provides drug product selection and formulary a health care organization, through its physicians, phar- maintenance (see above). macists, and other health care professionals, establishes • Provides drug use evaluation (also called drug policies on the use of drug products and therapies, and iden- utilization review) to enhance quality of care for tifies drug products and therapies that are the most medically patients by assuring appropriate drug therapy. 232 Formulary Management–Endorsed Document • Provides for the periodic evaluation and analysis • The formulary system should: of treatment protocols and procedures to ensure • Inform physicians, pharmacists, other health that they are up-to-date and are consistent with care professionals, patients, and payers about optimum therapeutics. the factors that affect formulary system deci- • Provides for the monitoring, reporting, and sions, including cost containment measures; the analysis of adverse results of drug therapy (e.g., procedures for obtaining non-formulary drugs; adverse drug reactions, medication errors) to and the importance of formulary compliance to continuously improve the quality of care. improving quality of care and restraining health care costs. The Pharmacy and Therapeutics (P&T) Committee, or • Proactively inform practitioners about changes equivalent body, comprised of actively practicing physicians, to the formulary or to other pharmaceutical man- pharmacists, and other health care professionals, is the mech- agement procedures. anism for administering the formulary system, which includes • Provide patient education programs that explain developing and maintaining the formulary and establishing how formulary decisions are made and the roles and implementing policies on the use of drug products. and responsibilities of the patient, especially the importance of patient compliance with drug • The Pharmacy and Therapeutics Committee: therapy to assure the success of that therapy. • Objectively appraises, evaluates, and selects • Disclose the existence of formularies and have drugs for the formulary. copies of the formulary readily available and ac- • Meets as frequently as is necessary to review and cessible. update the appropriateness of the formulary sys- • Provide rationale for specific formulary deci- tem in light of new drugs and new indications, sions when requested. uses, or warnings affecting existing drugs. • Establishes policies and procedures to educate The formulary system should include a well-defined process and inform health care providers about drug for the physician or other prescriber to use a non-formulary products, usage, and committee decisions. drug when medically indicated. • Oversees quality improvement programs that employ drug use evaluation. • The formulary system should: • Implements generic substitution and therapeutic • Enable individual patient needs to be met with interchange programs that authorize exchange of non-formulary drug products when demon- therapeutic alternatives based upon written guide- strated to be clinically justified by the physician lines or protocols within a formulary system. (Note: or other prescriber. Therapeutic substitution, the dispensing of therapeu- • Institute an efficient process for the timely pro- tic alternates without the prescriber’s approval, is il- curement of non-formulary drug products and legal and should not be allowed—see Glossary.) impose minimal administrative burdens. • Develops protocols and procedures for the use of • Provide access to a formal appeal process if a and access to non-formulary drug products. request for a non-formulary drug is denied. • Include policies that state that practitioners should Physicians, pharmacists, and other health care professionals not be penalized for prescribing non-formulary provide oversight of the formulary system. drug products that are medically necessary. • Health care organization policies should ensure ap- Appendix I—Glossary propriate oversight of the P&T Committee and its decisions by the medical staff or equivalent body. Drug Formulary System: An ongoing process whereby a health care organization, through its physicians, phar- The formulary system must have its own policies, or adhere macists, and other health care professionals, establishes to other organizational policies, that address conflicts of in- policies on the use of drug products and therapies, and terest and disclosure by P&T committee members. identifies drug products and therapies that are the most medically appropriate and cost effective to best serve • Formulary system policies should: the health interests of a given patient
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