Formulary

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Formulary

Formulary (/fɔːrˈmjʊləri/), derived from the Latin word "formula", is a list of prescription drugs, both generic and brand name, that are preferred by a health insurance plan. In general, if a medication is on your formulary, it will be covered by your insurance plan.

History

The concept of a formulary has been around since the Middle Ages, when it was used to refer to a list of formulas used in the preparation of medicinal remedies. The modern use of the term in the context of health insurance began in the 20th century.

Types of Formularies

There are two main types of formularies: open and closed. An open formulary includes a wide range of drugs and allows physicians to prescribe any drug they deem necessary. A closed formulary, on the other hand, only includes certain drugs and requires physicians to prescribe from this list unless a specific exception is made.

Formulary Management

Formulary management is the process by which the drugs on a formulary are selected. This process involves a committee of healthcare professionals who review the safety, efficacy, and cost-effectiveness of various drugs before deciding whether to include them on the formulary.

Related Terms

  • Pharmacy Benefit Manager (PBM): A third-party administrator of prescription drug programs.
  • Prior Authorization: A requirement that a physician obtain approval from a health insurance plan to prescribe a specific medication.
  • Step Therapy: A type of prior authorization where a patient must try and fail one or more specified treatments before a drug is covered.
  • Tiered Formulary: A formulary that groups drugs into categories based on cost. The lower the tier, the lower the cost to the patient.

See Also

External links

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