There are some basic tips or tricks to getting the most out of your insurance plan and to maintain the care patients are accustomed to.
A drug formulary is a list of medications that are covered by a prescription drug plan or a hospital. It is comprised of both brand name and generic drugs that have been determined by a committee to offer the greatest overall value.
The Pharmacy & Therapeutics Committee
The committee of medical professionals, known as the Pharmacy and Therapeutics (P&T) Committee, reviews medications for efficacy with consideration for cost or reimbursement and determines which drugs will be included or excluded in the formulary. They will also consider accessibility of the medications when making a determination to add a drug to the formulary.
The purpose of the P&T committee is to:
The P&T committee is comprised of health care providers such as physicians, mid-level prescribers, pharmacists, plan administrators, and quality assurance personnel. They each bring their professional judgement to support the decision-making process.
They typically will meet quarterly for an ongoing review to address new drugs and formulary change requests. Medications are always reviewed for clinical efficacy and safety first, followed by standards of medical care, other treatment options, accessibility to the consumer, and lastly for cost or reimbursement.
How does a drug formulary work?
A drug formulary can vary between open or closed.
Drug formularies can also be tiered, meaning the coverage depends on which tier a specific drug is categorized. The tiers may vary between 3 and 7 different levels. Most commonly are 3 tier plans:
In tier 1, the lowest level, the insurer will generally cover most or all of the drug price. In tier 3, the consumer will pick up the majority of the price. In addition to drug placement, some plans also layer in additional clinical and cost controls, known as utilization management. The most common types include:
Are there benefits of a drug formulary?
A drug formulary can minimize overall medical costs, improve access to more affordable care, and provide an improved quality of life. For the consumer who is relatively healthy and is not taking many prescriptions, a drug formulary is beneficial to keep the out-of-pocket costs low.
An effective formulary strategy can also provide significant savings for the health insurer while focusing on quality and meeting the needs of the consumer.
How to navigate your drug formulary
There are some basic tips or tricks to getting the most out of your insurance plan and to maintain the continued care patients are accustomed to.
Whether your plan has an open or a closed drug formulary, it is important be familiar with your current drug formulary. Your portion of drug costs will depend upon your knowledge of your insurance coverage.
Nicole Kruczek earned her B.S. in Pharmacy degree from Temple University and is currently enrolled in the Masters of Pharmacy Business Administration (MPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. She has spent the last two decades in management roles in various pharmacy operations in long-term care, specialty, and pharmacy benefit management.
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