Hometown Rx
 Plan Design
 What is MAC
 Publications on

 Web PPT by Dr. Garis

 Maintenance Drug
 Automatic Refill

 Specialty Pharmacy

 Member ID Cards
 Customer Service
products & services | members | clients | healthcare providers | brokers & consultants    

Formulary Management

A few words on Formularies...
First, everyone will tell you that a Formulary is based upon efficacy and outcomes. This is really only fancy terminology to say that it’s the best drug which produces the best results for the patients.

If this were true, then wouldn’t ALL formularies from ALL sources contain the SAME DRUGS?

Logic would say yes. However, this is not the case.

Yes, all formularies make an effort to consider efficacy and outcomes in the selection of drugs for inclusion on the formulary listing, however, sad to say, the selection process is largely governed by deals made with the drug manufacturers for drug rebates.

Why won’t a Formulary help my plan save money?

  1. Formularies typically contain a few drugs out of each of the major therapeutic categories, not all drugs.
  2. Most often a drug is included on a formulary as a result of rebate agreements.
  3. Industry average price of a Brand Name Drug is $90, and $22 for a Generic Drug.
  4. Direct to Consumer Marketing (TV, Newspaper, Magazine, Radio, Internet) all encourage use of brand name drugs. “Ask your doctor if this new and wonderful pill is right for you”
  5. The formulary pamphlet combined with the copay incentive on formulary drugs increases brand utilization.

All of that being said, HometownRx maintains a standard formulary and rebate agreement with Manufacturers. Should you choose to implement our formulary we can guide you through the process.

There are three types of formularies: Closed, Preferred, and Open. Each with benefits and drawbacks.

However, we have found that every $1.00 increase in rebates results in a $6.00 increase in average ingredient cost paid per prescription.

Rather than focus on increasing rebate dollars, HometownRx works with clients to manage the 20% of their medication mix that is contributing to 80% of total plan costs. We also encourage our plan sponsors to educate their members to better understand and actively participate in their own pharmacy benefit decisions.

 Employers Advise To Tweak Formularies to Increase Users' Awareness of Drug Costs (PDF file)