Economic impact of ambulatory care formulary restrictions at a large county health system.

PURPOSE: Study results documenting substantial cost savings achieved by an outpatient indigent-care pharmacy program through formulary modifications and optimized purchasing practices are presented. METHODS: Wholesale purchasing data were retrospectively evaluated to compare drug expenditures before and after a large Florida hospital's adoption of a tiered formulary system for three ambulatory care facilities serving mostly uninsured patients. The outcomes assessed included the average cost per prescription and total medication purchases before and after implementation of the tiered formulary, which was phased in over several months and accompanied by intensive educational programs targeting physicians and pharmacy staff. Other outcomes included cost avoidance resulting from an increased emphasis on patient assistance program (PAP) enrollment and the use of "bulk replacement" arrangements for prescription replenishment. RESULTS: During a designated nine-month postimplementation period, the average cost per prescription declined by 4.7% (from $19.86 to $18.92) relative to the baseline value. Six-month spending decreases of 36-58% from prior-year levels were achieved in 7 of the 10 most-purchased drug classes, with an overall 25% decline in medication purchases. Cost avoidance due to more aggressive use of PAPs and bulk replacement programs also yielded substantial program savings. CONCLUSION: Formulary streamlining and other cost-control initiatives at an outpatient pharmacy program were associated with a decrease in the average cost per prescription of $0.94 over a nine-month period. The primary endpoint showed a potential annualized savings of approximately $1 million.

A national survey on hospital formulary management processes.

PURPOSE: In light of formulary management guidelines from the American Society of Health-System Pharmacists (ASHP), and discussion of pharmacies' noncompliance with recent Joint Commission accreditation requirements, the University HealthSystem Consortium conducted a formulary management survey to determine member institutions' standard of practice. METHODS: An electronic survey was distributed to 227 institutions. Questions pertained to formulary structure, policies and procedures to manage formulary processes, tracking nonformulary medication use, pharmacoeconomic assessment, and Food and Drug Administration (FDA)-approved versus off-label medication use. RESULTS: Fifty-two institutions across the United States provided responses. Most institutions maintain written policies for how medications are requested (94%) and reviewed (88%) for formulary addition; 92% of institutions have a nonformulary medication process. Nonformulary medication use is tracked at 88% of institutions, and 85% of institutions conduct pharmacoeconomic analyses. Regarding The Joint Commission's requirement to approve drugs for specific indications, 40% of institutions approve drugs for all FDA-approved indications; 35% of institutions have not formally addressed this requirement. Approximately 31% of the institutions have a policy for approving a medication for an off-label indication. CONCLUSION: Portions of the ASHP guidelines have been implemented by most institutions, while 35% of institutions have yet to address The Joint Commission's clarification to approve drugs for specific indications.