Patient-Centered Formularies

The American Academy of Family Physicians (AAFP) is concerned certain ownership and/or financial arrangements among pharmaceutical manufacturers, pharmacy benefit management (PBM) organizations, mail order companies, health plans, retail pharmacies, pharmacists and other provider groups could create “conflicts of interest” or financial incentives that may harm patients (e.g. manufacturer discounts and/or rebates for the utilization of certain drugs). They may also result in compromised quality of care, excessively high premiums and “out-of-pocket” costs.

Guidelines

The AAFP is concerned by the extensive administrative burden, time and expense required of family physicians to navigate multiple conflicting and restrictive formularies. When developing and managing patient-centered formularies, family physicians, other prescribers and health plans should follow these guidelines:

1. Formularies should be developed through a collaborative process involving physicians, pharmacists, patients and experts in pharmaceutical science and economics.
2. Decisions about the inclusion of drugs on formularies must be made with a proper balance of efficacy, quality, ease of use and cost to patients to optimize individual patient outcomes and resource efficiencies.
3. Review, revision, and approval of formularies, including those provided by contracted PBMs, should be conducted by Pharmacy and Therapeutics (P and T) committees made up of payers and local physicians and other clinicians.
4. All P and T committee members should disclose direct pharmaceutical company-related stock holdings and other financial incentives.
5. Formulary design should prioritize patient needs, fiscal responsibility and evidence-based guidelines. Drug selection should focus on clinical outcomes, clinical comparability, safety, patient ease of use and bioequivalence. Financial impact and/or benefit to the plan should not override these factors.
6. Formulary changes should be communicated to physicians and pharmacies before implementation, allowing patients to continue with a previously approved drug until the physician, in consultation with the patient, decides to change to another drug. Patients stable on drugs should not be changed to a new product based solely on economic considerations, but on evidence-based therapeutic and quality of care considerations to promote optimal care.
7. Formularies should allow physician- and patient-friendly exceptions to drugs not included in the formulary.
8. Formularies should offer patients multiple levels of drug choice (from more to less restrictive) with patient cost sharing to account for patient preferences (e.g., direct marketing-induced demand).
9. Formularies should be designed to reduce or eliminate out-of-pocket costs for patients with chronic conditions to improve adherence and patient outcomes.
10. Health plans and PBMs should provide drug utilization and cost information to physicians in clear, understandable and actionable reports.
11. Health plans should provide PBM information to physicians and patients in a clear and useful format, including information concerning generic drugs and therapeutic substitution policies, patient costs, appeals processes, formulary choices, product information and contractual arrangements.
12. Formularies should limit restrictions to the most frequently prescribed, expensive or abused drug classes.
13. Formulary changes should consider the total cost to patients and physicians, including staff time, adverse outcomes, additional office visits and laboratory monitoring.
14. Formularies must be stable to avoid non-compliance, adverse reactions, increased costs and erosion of patient confidence while allowing for the inclusion of new FDA-approved drugs or indications. 
15. Health plan financial incentives to physicians should be assessed in the aggregate across all prescription drugs and tied to cost-effective practice and positive clinical outcomes rather than formulary compliance or cost. PBM or health plan drug utilization reviews (DUR) should also focus on these criteria.
16. Physicians should be able to appeal adverse decisions without sanction or economic penalty.
17. The pharmaceutical industry, PBMs, health plans and physicians should work collaboratively to conduct pharmacoeconomic research, publicly share the results and strive for consistency among drug formularies in the health care marketplace and within drug formularies over time.
18. Physicians should be paid for patient services to adjust prescriptions due to a request from a payer or third-party administrator or formulary changes, regardless of whether those services are provided in a face-to-face encounter.
19. For medications where ease of use has been demonstrated to improve medication adherence and/or outcomes, the easier-to-use medications should be maintained on the same drug tier as the more difficult-to-use medication (e.g., insulin pens rather than vial and syringe insulin).

(1999) (October 2025 COD)