You may have seen or heard the word “formulary” in association with your prescription drug plan and wondered what it means. To many, the word sounds like something you might find in a math textbook, but in the world of Prescription Drugs, the word formulary represents a list of prescription drugs, both generic and brand name, which offer the greatest overall value to Plan participants.
A formulary is a key part of any prescription drug plan. It is important to understand which medications it includes and which it excludes so you as the consumer of these needed medications can determine the most cost effective medications available to you.
Generic, Preferred and Non-Preferred Brand Medications
Typically, medications on the formulary list are grouped into three tiers: generic, preferred brand and non-preferred brand. Your share of the cost of a prescription, or co-payment, will depend upon your medication’s tier, with generic drugs at the lowest tier and non-preferred brand name medications at the highest.
Armed with the knowledge of knowing where specific medications are listed on the formulary list, enables you and your physician to choose clinically appropriate and cost-effective drugs for specific conditions.
The Goal—Save Money while providing clinically effective medications
Without a well-managed formulary, health plans such as the ones administered by Christian Brothers Services (CBS) would pay significantly more for medications, which would in turn result in higher contributions required from our members and higher cost sharing from participants in our programs. With newer and more expensive medications entering the marketplace seemingly every day, a well-managed formulary helps identify similar drugs that are as clinically effective but cost less.
Express Scripts Inc. is the Pharmacy Benefits Manager (PBM) CBS has contracted with and is responsible for creating and managing the formulary list for the medical trusts administered by CBS. According to the company, its National Preferred Formulary has saved its enrolled clients an estimated $10.6 billion since 2014, including a projected $3.2 billion for 2019 alone.
How is a Formulary Built?
Express Scripts creates its formularies with guidance from three distinct committees:
- The National Pharmacy & Therapeutics Committee (P&T) is a group of 15 independent physicians and one pharmacist that reviews medications from a purely clinical perspective and does not consider price in its decisions.
- The Therapeutic Assessment Committee (TAC), which is Express Scripts’ internal clinical review body consisting of clinical pharmacists and physicians, who review specific medications following Food and Drug Administration (FDA) approval using medical literature and published clinical trial data.
- The Value Assessment Committee (VAC), which considers the value of drugs by evaluating the net cost, market share, and drug utilization trends of clinically similar medications.
The P&T Committee reviews published research and clinical information and recommends that each medication either be included, excluded or optional to the formulary list. Each drug included on the formulary list must be approved by the FDA and reviewed by an independent group of doctors and pharmacists for safety and effectiveness.
The formulary list is built based on the following principles:
- Clinical appropriateness of the drug as the foremost consideration
- The prescribing physician always makes the final decision regarding an individual patient’s drug therapy
- Developing clinically sound formularies based on objective evaluations from independent physicians
How often is the Formulary list Updated?
Express Scripts now updates their broadest formulary quarterly. Members of the Christian Brothers Trusts can find the most updated formulary information by visiting our website, CBServices.org.
If the medication a member is currently taking changes status on Express Script’s formulary, ESI will notify that member well in advance of the change and suggest alternative medications in the same therapeutic class. They will also provide a list of Formulary Exclusions with Preferred Alternatives.
Ultimately, the purpose of your health plan’s formulary is to steer you to the least costly medications that are sufficiently effective for treating your health condition. All health plans have different formularies, and it is important for you to understand your plan’s formulary.
Talk With Your Doctor
If you need a prescription, talk with your healthcare provider about prescribing a generic drug or a preferred brand name drug if it is appropriate for your health condition. If a more costly medication is necessary, make sure your doctor is familiar with your health plan’s formulary, so that a covered medication is prescribed.
If you have questions about your prescription drug benefits, formulary management or about how generic drugs can help save you money, please visit CBServices.org.