AMCP releases 'sound' formulary principles

November 1, 2000

Pharmaceutical Representative

The Association of Managed Care Pharmacy, Alexandria, VA, has released the "Principles of a Sound Formulary," a set of guidelines the association hopes will be used by formulary decision-makers to "balance the healthcare quality and cost equation."

The Association of Managed Care Pharmacy, Alexandria, VA, has released the "Principles of a Sound Formulary," a set of guidelines the association hopes will be used by formulary decision-makers to "balance the healthcare quality and cost equation."

The principles were developed in response to "the widespread use of drug formularies in both inpatient and outpatient settings and the lack of understanding about formularies among the public," and are endorsed by the Academy of Managed Care Pharmacy, American Society of Health-System Pharmacists, Department of Veterans Affairs, Pharmacy Benefits Management Strategic Healthcare Group, National Business Coalition on Health and the U.S. Pharmacopeia.

According to the document, the formulary system should:


•Â Inform physicians, pharmacists, other healthcare professionals, patients and payers about the factors that affect formulary system decisions, such as cost containment measures, procedures for obtaining non-formulary drugs and the importance of formulary compliance in improving quality of care and restraining healthcare costs.


•Â Proactively inform practitioners about changes to the formulary or to other pharmaceutical management procedures.


•Â Provide patient education programs that explain how formulary decisions are made and the roles and responsibilities of the patient, especially the importance of patient compliance with drug therapy to ensure the success of that therapy.


•Â Disclose the existence of formularies and have copies of the formulary readily available and accessible.


•Â Provide rationale for specific formulary decisions when requested.


•Â Enable individual patient needs to be met with non-formulary drug products when demonstrated to be clinically justified by the physician or other prescriber.


•Â Institute an efficient process for the timely procurement of non-formulary drug products and impose minimal administrative burdens.


•Â Provide access to a formal appeal process if a request for a non-formulary drug is denied.


•Â Include policies that state that practitioners should not be penalized for prescribing non-formulary drug products that are medically necessary.

Common formulary practices

The association also released a report titled "Common Practices in Formulary Management Systems" that reveals the findings of eight organizations that were canvassed about common practices used in private sector managed care pharmacy benefit administration. Six pharmacy benefit managers and two health plans - administering pharmacy benefits for approximately 176,000,000 individuals – responded to a questionnaire that covered the following major areas: pharmacy and therapeutic committee composition, type of formulary structure used, cost-containment measures employed, categories and classes of drugs excluded from coverage and appeals process in place.

The questionnaire's aggregated results reveal that P&T committees are primarily comprised of, on average, 63% physicians, 32% pharmacists and 5% others. The results also show that over 50% of covered lives in health plans served by the respondents are under some type of open formulary system.

Respondents reported that only 1% of covered lives in health plans have a waiting period requirement greater than six months for newly approved drugs, and 38% of covered lives in health plans require mandatory generic substitution.

"The report provides an intriguing snapshot of the ways in which the managed care pharmacy benefit is administered today," said the executive director of AMCP, Judith A. Cahill. "The data fill an existing gap in healthcare literature." PR