Formulary Management
With limited financial means, it is essential for Medicaid agencies and managed care organizations to contain costs as much as possible. The use of a formulary, or preferred drug list, system can contribute to that goal.
UMass Medical School’s Clinical Pharmacy Services reviews and selects drugs for a client’s formulary based on safety, efficacy, and cost. By authorizing coverage of only those drugs on the formulary, our clients are able to manage the rate at which expensive new drugs are prescribed, especially when equally effective — but less costly — medications are already on the market.
Our clients also use the formulary system to encourage providers to try less costly alternatives for their patients first, only moving to the higher-priced options if the first therapies do not provide the desired result. For example, we designed and implemented a formulary for the Massachusetts Medicaid program, MassHealth, which now has one of the highest rates of generic use in the nation. The MassHealth Drug List, which we continue to manage, has grown to include more than 1,000 medications.
At Clinical Pharmacy Services, we use objective medical information and detailed cost-benefit analysis to determine which drugs should be placed on our clients’ formularies. We also take advantage of our team’s extensive clinical infrastructure, which offers us access to current, in-depth information. Our team of more than 60 clinical pharmacists provides us with essential resources as we design our clients’ drug lists and formularies:
- New-to-market drug reviews
- Clinical guidelines
- Therapeutic class reviews
- Pharmacoeconomic analysis
- Drug file changes
We use these resources to provide our clients with on going support and analysis. When we applied them to one state agency’s pharmacy program, we recommended placing preferred drug list restrictions on several categories of medication and had the following results:
- Acne drug management: $311,000 annualized cost savings
- Skeletal muscle relaxants: $156,000 annualized cost savings
- Branded cough/cold medicines: Nearly $40,000 in six months