Goshert Financial

FAQs About Drug Formularies

 

Recently you may have heard about formularies. Formularies have been used in hospitals for many years. Many health plans utilize them and most recently some medical groups have started relying on formularies. What is a formulary, how does it work and how will it affect you are just some of the questions we would like to answer for you.

Q.

What is a formulary?

A.

Simply stated, a formulary is a list of medications available to your health care provider to use in your treatment and covered as a prescription drug benefit for you. Most hospitals have used formularies for years to control costs while still providing quality medications. Health plans and even some large medical groups have turned to formularies to help put a lid on rising medication costs.

Q.

Are there different types of formularies?

A.

Basically, there are two types of formularies. An open formulary is a list of medications from which your health care provider can prescribe. In addition he or she would also be able to prescribe medications not on the formulary. A closed formulary allows your doctor to prescribe from the formulary list. All other medications (called non-formulary) would not be covered.

Q.

Why are formularies necessary?

A.

Medication costs continue to rise. Formularies list those medications which offer the best value without sacrificing quality of care. Keeping a lid on rising prescription costs help all of us reduce health care and premium costs.

Q.

Who decides which medications are on the formulary?

A.

Medications are added or deleted from a formulary only after careful review by a committee of practicing physicians and pharmacists. This committee, called a pharmacy and therapeutics committee, has the responsibility of reviewing new and existing medications. This committee decides which medications provide quality treatment at the best value.

Q.

How is a medication added or deleted from the formulary?

A.

A medication must first demonstrate safety and effectiveness to be added to a formulary. Only after this is determined is the cost of the medication considered. Some medications have similar safety and effectiveness however, are available at a lower cost. The lower cost medication would then be placed on the formulary while the higher cost medication would not.

Q.

How does my health care provider
know which drugs are on the formulary?

A.

Health plans print their formularies yearly. Formulary books are distributed to your health care provider annually. In addition, all changes to the formulary are communicated to your doctor on a regular basis.

Q.

What if my medication is not on the formulary?

A.

Formularies usually have listed alternative medications which often have the same therapeutics action on your body but, available at a lower cost. If your medication is not listed on the formulary, ask your doctor or pharmacist for an alternative.

 

 

 

FAQs About Generic Drugs

 

You've probably been hearing a lot about generic drugs at your pharmacy. Perhaps, when having a prescription filled, you were given a generic or asked if you wanted a generic product.

A number of questions and concerns have been raised about the quality of generics as compared to brand name products, and you wonder whether or not you should take them. Following are answers to some of the more commonly asked questions regarding generic pharmacy products. We hope this will answer most of your questions and many concerns you may have regarding generic drugs.

Q.

What is a generic drug?

A.

A new drug is given two names. One is the generic or chemical name. The other is the brand name, which is what the manufacturer chooses to call the product. Every drug has a generic name to describe its chemical makeup.

Q.

Why are generic drugs less expensive than brand name products?

A.

When a company develops a new drug, it has a patent for 17 years. The patent protects the drug company's right to be the only manufacturer of that drug. After the patent expires, other companies can then manufacture and sell the drug under either a different brand name of the generic name. Because of lower research costs and more competition, the new product is sold at a lower price than the original brand name product.

Q.

Who manufactures generic drug products?

A.

Many drug companies that manufacture brand name products also manufacture generic products. In fact, some 70 to 80 percent of all generic drugs are made by the same companies who make brand name products. And many companies that manufacture generic name products also manufacture drugs for the brand name companies.

Q.

How are generic drugs approved for use?

A.

All name brand products and generic products are reviewed for safety and effectiveness by the Food and Drug Administration (FDA). Before a generic drug is approved for use in the United States, its manufacturer must provide proof to the FDA that the product has the identical active chemical compound when compared to the brand name product. In addition, the generic product must meet FDA standards for the amount of active ingredient and speed absorption into the body. When the generic product meets these standards, it is considered equivalent.

Q.

Are generic drugs effective?

A.

To gain FDA approval, generic drugs must have the same effect on the body as the brand name product. This means that the generic product must contain the same active ingredient and must be the same strength. Sometimes, the generic product may have a different color or shape than the brand name product. This has no effect on the medical action of the drug; however, it does help to distinguish one product from another.

Q.

Are generic drugs safe?

A.

The FDA requires that all drugs be safe and effective, whether they are generic or brand name products. The FDA also monitors reports from health care providers (for example, doctors and pharmacists) on adverse drug reactions and has found that there is no difference between generic and brand name products.

Q.

Why does my health care plan have generic drugs on its formulary?

A.

Because generic drugs are less expensive than brand name products, the use of generic drugs help to hold down rising health care costs. In addition, generic drugs offer you a better value and may, in some cases, extend your yearly drug benefit limit (if a lower cost generic is used, a lesser dollar amount is applied toward your drug benefit).

The National Pharmacy & Therapeutics Committee (a committee of physicians and pharmacists who review medications for inclusion on the formulary) reviews brand and generic products based on efficacy, safety, and cost-effectiveness.

We hope you now have a better understanding of generic drugs, their effectiveness and safety, and how they are approved and manufactured.

Occasionally your doctor will prescribe a specific brand name product. Other times, your doctor will either prescribe or agree to have your pharmacist substitute a generic drug. Some brand name products are not available as generic. However, you can ask your doctor to, whenever possible, specify a product which is manufactured as a generic in order to help reduce costs and extend your benefit. Feel free to discuss the generic drug issue with your doctor or pharmacist the next time you receive a prescription and have it filled. When you have your prescription filled with a generic, you can be sure you are getting the quality medication you need at a better value.