Advocates say formularies control costs rationally by zeroing in on the medications that have been shown to be generally effective, while excluding similar but more costly drugs. There's an underlying potential for ethical problems, especially since patients may be unaware of the restrictions. In a report presented at the AMA Annual Meeting this summer, the AMA Council on Ethical and Judicial Affairs laid out ethical principles that should govern the use of formularies. Formulary policy should be subject to ongoing peer review. Other cost-saving measures, such as prescription caps and prior authorization, must not unduly burden patients and physicians.
Financial incentives are acceptable, but now when they require withholding necessary care.
Physicians should not feel that their compensation or participation in a plan is at risk if they prescribe costly, but needed, drugs. Incentives should be tied to quality of care and the experience of a sizeable group of physicians, rather than to individual physician performance. Prescriptions should not be changed without giving the doctor the opportunity to review the decision and discuss the change with the patient. Education on cost effectiveness is preferable to financial incentives or pressure from plans. Patients should also be told about plans' relationships with pharmaceutical benefit management companies or other ways drug company influence could come into play.