Quick Facts


Adding preferred drug list restrictions on certain drugs had an impact on one state agency’s pharmacy program:

  • Acne drug management: $311,000 annualized cost savings
  • Skeletal muscle relaxants: $156,000 annualized cost savings
  • Branded cough/cold medicines: Nearly $40,000 in six months



Using generic drugs in your formulary can provide significant savings for your pharmacy program.

Formulary Management

The use of a formulary, or a preferred drug list, can help Medicaid agencies and managed care organizations contain pharmacy costs while maintaining care quality. A formulary system can encourage providers to try less costly alternatives for their patients first, moving to higher-priced options only if the initial choice does not produce the desired results.

Clinical Pharmacy Services reviews and selects drugs for formularies based on safety, efficacy, and cost. By authorizing coverage of only those drugs on the formulary, you can increase generic utilization and manage the rate at which expensive new drugs are prescribed, especially when equally effective — but less costly — medications are already on the market.

For example, we designed and implemented a drug list for the Massachusetts Medicaid program. MassHealth now has one of the highest rates of generic utilization in the nation. The MassHealth Drug List, which we continue to manage, now includes more than 2,200 medications and receives over 19,000 visitors per month.

Evaluating drugs for a formulary

Clinical Pharmacy Services pharmacists and pharmacy technicians, depending on client preference, make formulary status recommendations. We also have physician advisors on staff to aid in the decision-making process.

When a new medication or product becomes available, our clinical staff launches an evaluation process to determine whether it should be placed on the formulary or remain a nonpreferred drug:

  • Reviews medical literature
  • Conducts a cost-benefit analysis
  • Synthesizes a monograph of the data, including a comparison to currently available products and/or formulations
  • Presents this information at Pharmacy and Therapeutics (P&T) Committee meetings and/or Drug Utilization Review (DUR) Board meetings

We take advantage of a wide variety of additional resources and our team’s knowledge and expertise as we design our clients’ drug lists and formularies: