The restrictive drug formulary may not seem as dramatic as a denied medical treatment or a shortened hospital stay. But it is one of the more profound changes brought about by managed care. Increasingly, formularies put certain medications out of reach for patients and physicians. Physicians can freely prescribe only drugs on the plan's approved list.
Some plans use incentives or pressure to keep physicians from prescribing nonformulary drugs.
In many cases, nonlisted medication isn't reimbursed or is subject to a co-pay. 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.