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Advancing Health Equity Through Medication Formulary Policy

The American Journal of Managed CareJuly 2023
Volume 29
Issue 7

Medication formulary policies represent a key determinant of access to medication and can be leveraged to advance pharmacoequity and health equity writ large.


Awareness of the presence and significance of disparities in American health outcomes is growing. Equitable access to appropriate medication—pharmacoequity—is foundational to equitable health care, with medication formularies representing a key determinant of medication access. Critical formulary design elements include clinical criteria, prescription processes, and patient access policies. Facets of each can be refined to ensure more equitable access to medications, including avoidance of prior authorization requirements, awareness of the complex determinants of human behavior, streamlined authorization processes, and optimized costs and convenience for patients. Optimizing these factors for proven treatments of conditions disproportionately borne by vulnerable communities is especially critical in the pursuit of equitable access. For policy makers at payer and pharmacy benefit manager organizations to successfully pursue corresponding changes in formulary policy, it is critical that teams educate leadership regarding the importance of policy change, invest in comprehensive patient data, and engage community members in their efforts.

Am J Manag Care. 2023;29(7):327-330. https://doi.org/10.37765/ajmc.2023.89393


Takeaway Points

This commentary outlines 3 aspects of medication formulary policy that policy makers can use to enhance medication access, pharmacoequity, and health equity as a whole:

  • Clinical criteria: Except when providers are likely to be unaware of, or insensitive to, objectively superior alternative medications, prior authorizations should be avoided; any necessary criteria should remain mindful of the complex nature of human behavior.
  • Prescription processes: Whenever necessary, prior authorization processes should be automated and should minimize or offset provider costs of navigating them.
  • Patient access: Minimizing cost sharing for high-value drugs, permitting dispensing flexibilities, and improving access to medication delivery can boost functional access to therapies.


The COVID-19 pandemic underscored how American health care has failed to address, and has even contributed to, growing health inequities. Inequities manifest across racial, geographic, and socioeconomic factors,1 ultimately negatively affecting the health, care, and costs of care for everyone in America.2 These inequities are often avoidable, underscoring society’s responsibility to address them.

Equitable access to medication is foundational to equitable health care. Disparities in access to and receipt of affordable medications—and their subsequent impact on health outcomes—are well documented. The term pharmacoequity was recently proposed to highlight the need for “a health care system where all patients, regardless of race, class, or availability of resources, have access to the highest quality, evidence-based medical therapy indicated for their condition.”3 Although pharmacoequity as a value may be broadly accepted, a key follow-up question is: How might health care tangibly achieve this goal?

Medication formularies offer a potential path forward. Formularies reflect decisions traditionally made by payers and pharmacy benefit managers (PBMs) around the conditions under which medications are covered, how eligibility for covered medications is determined, and how covered medications can be obtained. Taken together, formulary policy has a tremendous impact on individuals’ appropriate and timely receipt of medication.4 Although formulary decisions have historically been based primarily on the perceived efficacy, safety, and cost of medications, less attention has been paid to formularies’ impact on equitable health outcomes.

Payers, PBMs, and other policy makers must consider how formulary design affects equitable receipt of medication. Critical design elements include clinical criteria, prescription processes, and patient access policies. We outline how organizations can systematically address each of these elements to maximize equitable access to medications, with additional details in the Table.5-12

Clinical Criteria

Socioeconomically marginalized populations are more likely to develop many medical conditions and are less likely to be able to access appropriate care.5,13 Barriers to care are further exacerbated when payers impose clinical restrictions on coverage of medications used to treat these conditions.10

Recognizing these factors and the disparities they contribute to, policy makers should eliminate prior authorization (PA) requirements wherever possible. This is especially true for medications used to treat conditions disproportionately borne by vulnerable populations. When superior alternatives are available (ie, cost-effective alternatives with equivalent clinical effectiveness and/or lesser adverse effect profiles) and prescribers are either unfamiliar with these facts or insensitive to the costs, PA may be justifiable. However, any time these conditions are not met, providers should be allowed to optimize therapy without prospective constraints.14

For example, to improve evidence-based rapid initiation of HIV treatment, Virginia Medicaid removed authorization requirements for first-line HIV antiretrovirals. Similarly, recognizing the disproportionate burden of sickle cell disease on Black communities, Virginia Medicaid removed authorization requirements for underutilized sickle cell treatments including hydroxyurea, voxelotor (Oxbryta), and L-glutamine (Endari).

Second, when PA is deemed necessary, organizations should avoid criteria based on an overly simplistic understanding of patient behavior. These include adherence requirements, predefined clinical response targets, and criteria mandating patient avoidance of unhealthy behaviors (eg, substance use abstinence for hepatitis C treatment). Although such criteria may appear reasonable, they fail to account for the complex reality of human decision-making and the disparities in wealth, health, and resources that may confound patients’ ability to adhere to protocols and realize target outcomes. Instead, policy makers should respond to suboptimal medication use by leveraging outreach teams and real-time data to address social needs, language barriers, and competing physical and mental health priorities.15 By investing in, instead of averting, care for these individuals, we stand to not only address underlying drivers of disease but also avoid reinforcing counterproductive stigma.

Third, in addition to revisiting use of PA, organizations should use caution around other forms of billing restrictions. These include restrictions based on medication claims fields such as sex and provider subspecialty type, which can impede access for transgender populations and those without access to subspecialists. For example, as hepatitis C virus (HCV) treatment regimens became less toxic, simpler to use, and increasingly familiar to generalists, Virginia Medicaid eliminated requirements that certain HCV antiviral agents be prescribed by a gastroenterologist or infectious disease specialist.

Prescription Processes

In addition to revisiting when patients are eligible for covered medications, formulary decision makers should critically reevaluate how providers navigate prescription and permission processes.

First, payers and PBMs should improve the navigability of their formularies. This includes greater visibility of medication inclusion and coverage criteria and streamlined PA processes.9 Reducing provider friction can improve provider willingness to treat patients with complex health needs. It can also be achieved in many ways. For example, digital submission and autoauthorization (eg, CoverMyMeds) can be used to simplify authorization submission processes and eliminate delays in authorization, as recently advocated for in a recent CMS proposed rule.16 Alternatively, authorization forms can be streamlined, as Virginia Medicaid recently did by replacing agent-specific forms with class-based forms. In instances in which it is appropriate to decline authorization requests, organizations should direct providers to evidence-based formulary alternatives.

Second, when PA is deemed necessary, organizations should compensate providers for the costs of navigating PA.17 Without compensation, providers are actively disincentivized from prescribing medication even when it is medically indicated and appropriate for an individual. This is especially true at practices with a disproportionately high rate of publicly insured patients. Eliminating this disincentive could be done directly, by reimbursing providers for every PA successfully approved, or indirectly, such as through alternative payment models. An alternative strategy explored by some is to use “golden ticket” arrangements allowing prescribers who have demonstrated awareness of appropriate prescribing practices to prescribe certain medications without typical authorization requirements.

Patient Access

Lastly, decision makers can reduce barriers to vulnerable populations’ ability to receive and adhere to prescribed medications in several ways.

First, policy makers should remove co-pays and coinsurance payments for high-value medications. These include guideline-directed medications, particularly medications indicated for the prevention of disease or management of chronic diseases. Removing financial burdens for these medications can improve equitable health outcomes by minimizing the financial disincentives disproportionately experienced by racially, socially, and geographically vulnerable populations by virtue of their increased risk of many morbid chronic diseases and financial distress.18

Second, policy makers can increase patients’ dispensing and dosing options. For example, formularies can increase the number of days of treatment that members are allowed to fill at once,11 expand coverage of long-acting agents,19 and allow short fills for medication synchronization.20 Doing so can minimize the need for patients to juggle multiple prescription timelines and navigate repeated pharmacy visits. For example, Virginia Medicaid recently authorized 90-day fills on noncontrolled maintenance medications in light of their association with increased adherence to treatment.21

Third, policy makers can reduce barriers to reaching pharmacies.22,23 This can be accomplished by authorizing payment for medication delivery, improving availability of mail-order pharmacies, and providing specialty pharmacy alternatives.24 For example, Virginia Medicaid recently updated its formulary policy to allow HIV and HCV antiretrovirals to be filled at any retail pharmacy, as opposed to restricting them to specialty pharmacies only.

Equipping Organizations to Advance Equitable Formulary Policy

Organizations interested in advancing pharmacoequity through formulary policy as outlined here can begin by taking the following steps.

First, organizations should ensure executive leadership buy-in around the importance of pharmacoequity and the need to pursue it via formulary policy.25 Because pharmacy policy is uniquely complex, and because leaders are unlikely to prioritize investing limited resources (eg, staff, organizational priorities, financial capital) in changes they don’t fully understand, teams must invest in educating leaders on the implications of formulary decisions on patient experience, cost, quality, and equity. One way that executives can demonstrate buy-in is by attaching pharmacoequity to leaders’ compensation. For example, leaders at SCAN Health Plan15 and Penn Medicine26 recently attached executive compensation to health equity performance. Doing so ensures that the operational steps outlined earlier are not avoided because of competing short-term investments.

Second, organizations should invest in maximally complete, reliable, and standardized demographic data (ie, ethnicity, race, gender, sexual orientation, disability status, and geography). Previous reports have underscored significant shortcomings in race and ethnicity data,27 undercutting efforts to identify and address inequities. Others have demonstrated how data can be standardized and made complete28 in a way that enhances organizational and national efforts to address various inequities in care.

Third, organizations need to be prepared to invest in a community-informed approach to data analysis. This begins by engaging community members early on. Members of vulnerable communities can not only help identify at-risk populations and access challenges, but also guide the interpretation of data and inform solutions that might be most impactful.


Equitable receipt of evidence-based medication is critical to achieving the quintuple aim of health care.29 Various opportunities exist for payers, PBMs, and policy makers to address barriers to pharmacoequity. Although prior reports have described several ways to do so—such as by reducing co-pays, instituting behavioral economics–informed provider prompts, expanding access to care (eg, through transportation assistance and telehealth coverage), and initiating targeted outreach—medication formulary policy represents a unique set of imminently actionable opportunities. Formulary decision makers can proactively design coverage criteria, prescription processes, and patient access policies to advance pharmacoequity. 

Author Affiliations: Virginia Department of Medical Assistance Services (JWM, JE), Richmond, VA; Department of Internal Medicine, School of Medicine, Virginia Commonwealth University (JWM), Richmond, VA; Leonard Davis Institute of Health Economics, University of Pennsylvania (JWM, CB), Philadelphia, PA; Harris Health System (CB), Houston, TX.

Source of Funding: None.

Author Disclosures: Dr Morgan is employed by the Virginia Department of Medical Assistance Services, an agency that makes formulary decisions. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

The content of this article is solely the responsibility of the authors and does not reflect the views of the Virginia Department of Medical Assistance Services or any of the authors’ current or former employers.

Authorship Information: Concept and design (JWM, JE, CB); drafting of the manuscript (JWM, JE, CB); critical revision of the manuscript for important intellectual content (JWM, JE, CB); administrative, technical, or logistic support (JE); and supervision (JWM, CB).

Address Correspondence to: John W. Morgan, MD, Virginia Commonwealth University, 417 N 11th St, Richmond, VA 23219. Email: jwmorgan88@gmail.com.


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