Pharmacy and Therapeutics Committee and the Formulary System

ASHP Statement on the Pharmacy and Therapeutics

Committee and the Formulary System

Position

American Society of Health-System Pharmacists (ASHP)

believes that health systems should develop, organize, and

administer a formulary system that follows the principles

below in order to optimize patient care by ensuring access to

clinically appropriate, safe, and cost-effective medications.

Background

A formulary is a continually updated list of medications and

related information, representing the clinical judgment of

pharmacists, physicians, and other experts in the diagnosis

and treatment of disease and promotion of health.

A formu-

lary includes, but is not limited to, a list of medications and

medication-associated products or devices, medication-use

policies, important ancillary drug information, decision-

support tools, and organizational guidelines. The multiplicity

of medications available, the complexities surrounding their

safe and effective use, and differences in their relative value

make it necessary for health systems to have medication-use

policies that promote rational, evidence-based, clinically ap-

propriate, safe, and cost-effective medication therapy. The

formulary system is the ongoing process through which a

health care organization establishes policies on the use of

drugs, therapies, and drug-related products and identifies

those that are most medically appropriate and cost-effective to

best serve the health interests of a given patient population.

Pharmacy and Therapeutics Committee

To be effective, medication-use policies must have the con-

currence of individuals involved in the medication-use proc-

ess. Such consensus is achieved by developing medication-

use policies through a properly organized and representative

pharmacy and therapeutics (P&T) committee or equivalent

body and ensuring that those policies are approved by the

organized medical staff.

The P&T committee is composed of actively partici-

pating physicians, other prescribers, pharmacists, nurses,

administrators, quality-improvement managers, and other

health care professionals and staff who participate in the

medication-use process. Customarily, P&T member appoint-

ments are based on guidance from the medical staff. The

P&T committee should serve in an evaluative, educational,

and advisory capacity to the medical staff and organizational

administration in all matters that pertain to the use of medica-

tions (including investigational medications). The P&T com-

mittee is a policy-recommending body to the medical staff

and the administration of the organization on matters related

to the safe and therapeutic use of medications. The P&T

committee is responsible to the medical staff as a whole, and

its recommendations are subject to approval by the organized

medical staff as well as the administrative approval process.

The basic policies and procedures that govern the P&T com-

mittee’s administration of the formulary system should be

incorporated, as appropriate, in the health system’s medical

staff bylaws, medical staff rules and regulations, and other

organizational policies.

The overarching purposes of the P&T committee are

policy development, communication and education, and for-

mulary management.

Policy Development

The P&T committee formulates policies regarding evalua-

tion, selection, diagnostic and therapeutic use, and monitor-

ing of medications and medication-associated products and

devices. The P&T committee should establish and assist in

programs and procedures that ensure safe and effective medi-

cation therapy (e.g., clinical care plans, treatment guidelines,

critical pathways, disease management protocols). Members

of the P&T committee, or their representatives from appro-

priate specialties (including pharmacists), should participate

in or direct the development and review of such programs or

procedures, which should be kept current.

The P&T committee should participate in performance

improvement activities related to procurement, prescrib-

ing, dispensing, administering, monitoring, and overall use

of medications. The P&T committee should advise the in-

stitution, including the pharmacy department, in the imple-

mentation of effective medication distribution and control

procedures, incorporating technological advances when ap-

propriate. The P&T committee should initiate, direct, and

review the results of medication-use evaluation programs

to optimize medication use and routinely monitor outcomes

(economic, clinical, and humanistic) of formulary decisions.

Medication-use evaluation should result in performance-im-

provement initiatives to improve the medication-use process.

The P&T committee should take actions to prevent,

monitor, and evaluate adverse drug reactions and medication

errors in the health care setting, including those occurring

with biological products and vaccines. Information from

these activities should be disseminated to the appropriate

health care personnel for informational and educational pur-

poses (e.g., newsletters, memoranda) and, when appropriate,

to the Food and Drug Administration (FDA).

The P&T committee should establish clearly defined

policies and procedures related to manufacturer sales repre-

sentatives’ activities within the organization.

Communication and Education

The P&T committee ensures that mechanisms are in place to

communicate with health care professionals, patients, and pay-

ers about all aspects of the formulary system, including changes

made to the formulary or policies and how formulary system

decisions are made. The P&T committee also recommends or

assists in the formulation of educational programs designed

to meet the needs of professional staff, patients, families, and

caregivers on matters related to medications and medication

use. The P&T committee should establish or plan suitable edu

cational programs on matters related to medication use for staff

involved in the care of patients and the use of medications.

Formulary Management–Statements 213

Formulary Management

Health systems should develop, organize, and administer a

formulary system that follows the principles below in order

to optimize patient care by ensuring access to clinically ap-

propriate, safe, and cost-effective medications.

Formulary System. The P&T committee is responsible for

administering the formulary system. Although the basic or-

ganization of each health care setting and its medical staff

may influence the specific functions and scope of the P&T

committee, key elements of a formulary system that should

also be included are the evaluation of the clinical use of

medications (including outcomes), the development of poli-

cies and quality assurance activities for medication use and

administration, and the evaluation and monitoring of ad-

verse drug reactions and medication errors. The formulary

system shall be endorsed by the medical staff based on the

recommendations of the P&T committee. The medical staff

should adapt the principles of the system to fit the needs of

the particular organization and affiliated institutions and am-

bulatory care settings. The organization, often through the

pharmacy department, should make certain that all personnel

involved in the care of patients and the use of medications in

all health-system components are informed about the exis-

tence of the formulary system, how to access the formulary,

the procedures governing its operation, any changes in those

procedures, and other necessary information (e.g., changes

in drug product availability). This information may be fur-

ther disseminated to other interested entities (e.g., affiliated

managed care organizations).

Formulary. The P&T committee develops an evidence-

based formulary of medications and medication-associated

products accepted for use in the organization. The commit-

tee also provides timely revision and maintenance for the

formulary and promotes the rational, clinically appropriate,

safe, and cost-effective use of medications via guidelines,

protocols, and other mechanisms. The P&T committee, on an

ongoing basis, objectively appraises, evaluates, and selects

medications for addition to or deletion from the formulary.

The formulary is based on the best clinical evidence avail-

able and reflects the current clinical judgment of the medical

staff, pharmacists, and other health care experts. The selec-

tion of items to be included in the formulary should be based

on objective evaluation of their relative economic, clinical,

and humanistic outcomes. The decisions should not be based

solely on economic factors. The committee should identify

potential safety concerns for each medication considered for

inclusion in the formulary and should ensure those safety

concerns are addressed if the medication is added to the for-

mulary or used in the health system.

The committee should minimize unnecessary duplica-

tion of the same basic drug type, drug entity, or drug product.

Optimizing the number of drug entities and products avail-

able from the pharmacy can produce substantial patient care

and financial benefits. These benefits are greatly increased

through the use of generic equivalents (drug products con-

sidered identical or equivalent by FDA) and therapeutic

equivalents (drug products differing in composition or basic

drug entity that are considered to have similar pharmaco-

logic and therapeutic activities).

The P&T committee must

set forth policies and procedures that govern the dispensing

of generics and therapeutic equivalents.

The P&T committee, when considering formulary op-

tions, should evaluate coordination issues with local health

care plans and other organizations’ formularies. At a mini-

mum, appropriateness of therapeutic interchange should be

evaluated for any formulary decisions that may conflict with

known managed care or other health plan formularies.

The formulary should be published and updated regu-

larly. It should also be readily available and accessible at

all times, either manually or electronically, to all personnel

involved in the care of patients and the use of medications.

Medications should be identified in the formulary by their

generic names, and prescribers should be strongly encour-

aged to order medications by their generic names.

The P&T committee should clearly define terminology

related to formulary status of medications (e.g., formulary,

nonformulary, not stocked at a given site, restricted by cri-

teria specific to a given site), especially in multihospital or-

ganizations, and disseminate this information to health care

professionals involved in the medication-use process. The

P&T committee should establish a procedure for appraisal

and use by the medical staff of medications not included in

the formulary (i.e., nonformulary medication use).

The pharmacist shall be responsible for specifications

for the quality, quantity, and source of supply of all medica-

tions, chemicals, biologicals, and pharmaceutical prepara-

tions used in the diagnosis and treatment of patients.

Conclusion

ASHP believes that medication-use policies should be de-

veloped and implemented in organized health-care systems

to promote the rational, evidence-based, clinically appropri-

ate, safe, and cost-effective use of medications. The P&T

committee of a health system should develop, organize, and

administer a formulary system that follows the principles set

forth in this statement in order to optimize patient care.

References

1. Principles of a sound drug formulary system [con-

sensus statement]. In: Hawkins B, ed. Best practices

for hospital & health-system pharmacy: positions

and guidance documents of ASHP. Bethesda, MD:

American Society of Health-System Pharmacists;

2006:110–3.

2. U.S. Department of Health and Human Services.

Electronic orange book: approved drug products with

therapeutic equivalence evaluations. www.fda.gov/

cder/ob/ (accessed 2008 Sep 24).

This statement was reviewed in 2012 by the Council on Pharmacy

Practice and by the Board of Directors and was found to still be

appropriate.

Approved by the ASHP Board of Directors on January 23, 2008

and by the ASHP House of Delegates on June 10, 2008. Developed

through the ASHP Council on Pharmacy Practice. This statement

supersedes the ASHP Statement on Pharmacy and Therapeutics

Committee dated November 20, 1991, and the ASHP Statement on

the Formulary System dated November 18, 1982.

214 Formulary Management–Statements

Linda S. Tyler, Pharm.D., FASHP; Mirta Millares, Pharm.D.,

FCSHP, FASHP; Andrew L. Wilson, Pharm.D., FASHP; Lee C.

Vermeulen, Jr., B.S.Pharm., M.S.; J. Russell (Rusty) May, Pharm.D.,

FASHP; Michael A. Valentino, M.H.S.A.; and Sabrina W. Cole,

Pharm.D., are gratefully acknowledged for drafting this statement.

The drafters have declared no potential conflicts of interest.

ASHP also acknowledges the following organizations and indi-

viduals for reviewing drafts of this statement: Academy of Managed

Care Pharmacy (AMCP); American Nurses Association (ANA);

American Society for Clinical Pharmacology and Therapeutics

(ASCPT); American Society of Consultant Pharmacists (ASCP);

Institute for Safe Medication Practices (ISMP); Pharmacy Com-

pounding Accreditation Board (PCAB); Daniel T. Abazia, Pharm.D.;

Philip Anderson, Pharm.D., FASHP; Lilian M. Azzopardi,

B.Pharm., M.Phil., Ph.D.; Kenneth R. Baker, J.D. (PCAB); James

L. Besier, Ph.D., FASHP; J. Lyle Bootman, Ph.D., Sc.D.; David

G. Bowyer, B.S.; Mau reen Brady, Pharm.D.; Margaret Chrymko,

Pharm.D., FASHP; Joseph W. Cranston, Ph.D.; Steven Dzierba,

M.S., FASHP; Michael Gaunt, Pharm.D. (ISMP); Pamela C.

Hagan, M.S.N., R.N. (ANA); Raymond W. Hammond, Pharm.D.,

BCPS, FCCP; Eric T. Hola, M.S.; Patricia Kienle, B.S.Pharm.,

M.P.A., FASHP; Katharine Kiser, Pharm.D.; Thomas L. Kurt,

M.D., M.P.H., FACPM, FACMMT, FAACT, FCP, FACE (ASCPT);

Timothy R. Lanese, M.B.A., FASHP, FACHE; Rosario (Russ) J.

Lazzaro, M.S.; Melvin E. Liter, M.S., Pharm.D.; Patrick M. Malone,

Pharm.D., FASHP; Candis M. Morello, Pharm.D., CDE, FCSHP;

Richard O’Brocta, Pharm.D., BCPS; Folakemi T. Odedina, Ph.D.;

James A. Ponto, M.S., BCNP, FASHP; Curt W. Quap, M.S.; Mike

Rouse, B.Pharm., M.P.S.; Marissa Schlaifer, M.S. (AMCP); Shelley

Hoppe Schliesser, Pharm.D.; Michele F. Shepherd, Pharm.D., M.S.,

BCPS, FASHP; Jonalan Smith, Pharm.D. (ASCP); Allen J. Vaida,

Pharm.D., FASHP (ISMP); William E. Wade, Pharm.D., FASHP,

FCCP; Tom W. Woller, M.S., FASHP; and John L. Woon, Pharm.D.,

FASHP. (Review does not imply endorsement.)

The bibliographic citation for this document is as follows: American

Society of Health-System Pharmacists. ASHP statement on the

pharmacy and therapeutics committee and the formulary system.

Am J Health-Syst Pharm. 2008; 65:2384–6.

Formulary Management–Statements 215