Formulary Management

Category: business

The process of selecting, approving, and managing the list of medications that a hospital stocks and authorizes for use.

The P&T (Pharmacy and Therapeutics) Committee manages the formulary. They balance clinical efficacy, cost-effectiveness, and side-effect profiles to choose the most reliable drugs. Limiting the formulary reduces pharmacy errors and optimizes bulk-buying power across the hospital system.

Common Examples

• The pharmacy committee performed an annual formulary management review, removing an outdated antibiotic and replacing it with a more cost-effective generic.
• Strict formulary management prevents physicians from prescribing redundant medications, reducing the total inventory footprint and pharmacy workload.