Drug Formulary Law and Legal Definition

Drug formulary refers to the list of prescription medications or pharmaceutical products developed and approved by each health plan to encourage greater efficiency in the dispensing of prescription drugs without sacrificing quality. The list will contain both generic and brand name drugs selected for coverage under a health insurance plan. Drugs named in the drug formulary are dispensed to a covered person through participating pharmacies.

Drugs are included in the drug formulary list by a committee of doctors, pharmacists, and other medical experts on the basis of their efficacy, safety, and cost-effectiveness. Generally, coverage for non-formulary drugs is given only after obtaining a preauthorization. Sometime coverage for a non formulary drug will not be included in the health insurance plans.