Application of Pharmacoeconomics to Formulary Decision Making in Managed Care Organizations

Dong Churl Suh, Ijeoma R.N. Okpara, Wendy B. Agnese, Michael Toscani

Research output: Contribution to journalReview articlepeer-review

20 Scopus citations


Objective: To discuss the apparent value of incorporating pharmacoeconomic studies into pharmacy and therapeutic committee decision making; current internal and external barriers to the use of pharmacoeconomic studies; and possible solutions to the problems. Study Design: Literature review. Results: The formulary system assists healthcare providers in the evaluation, appraisal, and selection of drugs. Unfortunately, managed care organizations usually evaluate drugs exclusively on clinical efficacy, safety, and daily acquisition cost without considering overall cost effectiveness. Factors that have been impeding the use of pharmacoeconomic data include departmental budgetary constraints, tardy publications, limited reliability of available studies, and a lack of knowledge required to evaluate such studies. Conclusions: To remain competitive, managed care organizations need to incorporate pharmacoeconomic consideration into their formulary decision-making process. Performing an institutionwide economic evaluation; conducting pharmacoeconomic studies earlier, perhaps along with clinical trials; using decision analysis; developing standardized guidelines; and increasing education can help overcome current barriers.

Original languageEnglish (US)
Pages (from-to)161-169
Number of pages9
JournalAmerican Journal of Managed Care
Issue number2
StatePublished - Feb 2002

ASJC Scopus subject areas

  • Health Policy


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