Health Plan (7.4) 7.4

P-OPS 10 - Economic Formulary Considerations

Submited by: Tom Goddard

The Basics

In order to assure that cost issues do not supercede clinical issues, this standard prohibits consideration of economic factors of a medication before its safety efficacy, therapeutic appropriateness, and side effects have been established. Once those issues have been considered, it is appropriate to evaluate equivalent alternative medications and therapies in terms of their impact on health costs.

Management Tips

The decision of which medications to include in and exclude from the formulary appropriately rests with the P&T Committee. Thus, the documents establishing the functions of that committee should address the requirements of this standard in sufficient detail and specificity to guide staff members supporting that committee. Make sure to require that the committee conduct an annual (or more frequent) evaluation of costs. 
Make sure that the committee minutes clearly reflect that clinical issues are considered before cost issues.

Accreditation Tips

Desktop Review
In addition to the applicable P&P, a sample cost evaluation report, and sample P&T Committee meeting minutes.
Validation Review
The onsite review will focus on an interview of staff members supporting the P&T Committee. In addition, the reviewer will review P&T Committee meeting minutes to find evidence of the annual cost evaluation discussion.

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