A key goal of the formulary is to establish guidelines for physicians and prescribers, so they will dispense drugs that are proven to be the most safe and effective ones on the market for a given medical condition. Cost is a factor when making decisions about which drugs to include on the formulary, but it is secondary to quality considerations. A formulary is just one of many tools used by managed care organizations and other providers to assure quality of care in a cost-effective manner. Formularies enhance patient care by essentially screening out those drugs which may not be as effective as others, or which may pose more adverse side effects for patients. Formulary decisions are made based on clinical data and experience.
Cost also comes into play in cases where drugs are very similar.
Your organization claims formularies don't work in a vacuum. Formularies are important tools in assuring quality of care in a cost-effective manner. But they work best when they are part of a larger system of integrated care. For example, in a well-managed pharmacy care program, pharmacists and other care givers will perform drug utilization review and drug use evaluation. These tools allow care givers to identify situations in which patients and prescribers may be inappropriately using medications.