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Formulary Considerations: The Past, Present, and Future

Molly Billstein Leber, PharmD, BCPS, FASHP
The hospital formulary system is an ongoing process that evaluates and selects the safest, most effective, and most economical care for hospitalized patients. As healthcare continues to change, so will the formulary management process.
Protocol to Incorporate Formulary Changes 

When planning for formulary additions and changes, the medication’s integration into technology should be carefully coordinated: 
  • Dosage forms, concentrations, and ordering options should be limited and standardized. 
  • Required monitoring for efficacy and toxicity should be built into computerized prescriber order entry (CPOE) panels or sets whenever possible. 
  • If a drug is infused through a smart pump, it should be programmed with a standardized concentration and volume and the appropriate limits. 
  • All formulary drugs should be available for ordering in the CPOE system, minimizing the need for verbal orders. 
In addition to the clinical and operational considerations necessary for formulary evaluation, the focus of health systems has changed. Healthcare organizations now focus on value-based reimbursement models and participating in accountable care organizations. These changes are simultaneously forcing P&T committees to change. There has been a transition to ensuring compliance with regulations and meeting publicly reported quality metrics.6 P&T committees have also expanded their focus to include the oversight of CPOE and the associated medication orders and order sets and building the necessary clinical decision support. However, the most significant change in healthcare that has impacted P&T committees and formulary management is the focus on cost containment and reimbursement while being able to provide high-quality patient care. As the healthcare payment structures continues to change, the structure and oversight of P&T committees will continue to transform, too. 

Oncology Drugs 

One of the most notable drivers of this change is the high cost and complicated treatment regimens of oncology drugs. It is now essential for health systems to, in addition to input from the medical staff, consider the patient mix and chief insurance provider when making a formulary decision. To make this transition, P&T committees will need to transform how they have historically conducted business. 

Traditional drug monograph reviews are solely based on safety, efficacy, and acquisition cost. After a request for formulary addition is received, the monograph is created by a clinical pharmacist and reviewed by physician stakeholders. The recommendations are often based on a published consensus statement or guideline, which may not consider the overall cost within the recommendation. In the future, health systems will be looking at P&T committees to take different factors into consideration to determine how best to utilize drugs to provide the most value to their patients, weighing efficacy, safety, cost, and outcomes. 

Cancer care accounts for 5% of total US healthcare costs, and these costs continue to rise. Estimates suggest that the annual rate of spending will rise to $158 billion in 2020 from $120 billion in 2010, and the expenditures for oncology drugs are rising more rapidly than any other facet of healthcare.6 There continues to be an increasing financial burden associated with chemotherapeutic agents. The rising cost of cancer treatment is a significant contributor resulting in personal bankruptcy.7 

To start the discussion around value and to determine the best way to include pharmacoeconomic analyses into formulary management, several initiatives have been undertaken in an attempt to define the value of drugs used for cancer care, including the American Society of Clinical Oncology’s Value Framework, the European Society of Medical Oncology’s Magnitude of Clinical Benefit Scale, the National Comprehensive Cancer Network’s Evidence Blocks, Memorial Sloan Kettering Cancer Center’s Drug Abacus, and the Institute for Clinical & Economic Review’s Value Assessment Framework. These frameworks display similarities, but differ in their purpose, focus, and means of assessment. The final objective of all of these initiatives is to assist with the assessment of value in cancer care; however, most of these frameworks are relatively new and a significant amount of work remains to be done to determine how best to integrate these assessments into the ultimate formulary decision.8-12 

Although the costs of drugs continue to rise, the question of the relative value of the drug itself is left unanswered by our current healthcare system. We cannot continue to review drugs in silos based only on safety, efficacy, acquisition costs, and outcomes. Healthcare systems also need to be aware of all the current regulations and intricacies of their CPOE system to ensure safe delivery of drugs that are added to the formulary. 


Molly Billstein Leber, PharmD, BCPS, FASHP, is manager, Medication Policy and Formulary Management, Yale New Haven System, New Haven, Connecticut. 


Molly Billstein Leber, PharmD, BCPS, FASHP 
200 Orchard St. Scranton (SRC)-Department of Pharmacy 
Yale New Haven Health System 
New Haven, CT 06510 


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2. Poon EG, Keohane CA, Yoon CS, et al. Effect of bar-code technology on the safety of medication administration. N Engl J Med. 2010;362(18):1698-1707. doi: 10.1056/NEJMsa0907115. 

3. Seibert HH, Maddox RR, Flynn EA, Williams CK. Effect of barcode technology with electronic medication administration record on medication accuracy rates. Am J Health-Syst Pharm. 2014; 71:209-218. doi: 10.2146/ajhp130332. 

4. <800> Hazardous drugs—handling in healthcare settings. United States Pharmacopoeia website. Published February 1, 2016. Accessed August 23, 2017. 

5. § 602; PHS Act § 340B; 42 U.S.C. § 256b. Government publishing office website. Accessed August 23, 2017. 

6. Boucher B. Formulary decisions: then and now. Pharmacotherapy. 2010;30(6 Pt 2):35S-41S. doi: 10.1592/phco.30.pt2.35S. 

7. Meropol NJ, Schrag D, Smith TJ, et al; American Society of Clinical Oncology. American Society of Clinical Oncology guidance statement: the cost of cancer care. J Clin Oncol. 2009;27(23):3868-3874. doi: 10.1200/JCO.2009.23.1183. 

8. Schnipper LE, Davidson NE, Wollins DS, et al. Updating the American Society of Clinical Oncology Value Framework: revisions and reflections in response to comments received. J Clin Oncol. 2016;34(24):2925-2934. doi: 10.1200/JCO.2016.68.2518. 

9. Cherny NI, Sullivan R, Dafni U, et al. A standardised, generic, validated approach to stratify the magnitude of clinical benefit that can be anticipated from anti-cancer therapies: the European Society for Medical Oncology Magnitude of Clinical Benefit Scale (ESMO-MCBS). Ann Oncol. 2015;26(8):1547- 1573. doi: 10.1093/annonc/mdv249. 

10. NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines) with NCCN Evidence Blocks. National Comprehensive Cancer Network website. Published 2016. Accessed August 23, 2017. 

11. Drug Abacus. Memorial Sloan Kettering Cancer Center website. https:// Accessed August 31, 2017. 

12. Ollendorf D, Pearson SD. ICER evidence rating matrix: a user’s guide. Institute for Clinical and Economic Review website. uploads/2016/01/Rating-Matrix-User-Guide-FINAL-v10-22-13.pdf. Published 2016. Accessed August 23, 2017. 
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