About Health Insurance Formulary

A formulary is a list of medications produced by a health insurance organization (such as an insurance company or, in some countries, a government bureaucracy), stating what drugs it will pay for and at what price. Drugs not listed on the formulary may still be available for sale, but will not be covered by the insurance provider.

The term formulary is drawn from collections of chemical formulae and compounds used for preparing medications, but in contemporary use it usually instead refers to a list of medications prepared for an organization responsible for paying for medications. Typically the formulary is restricted to prescription medication, and provides a (usually lengthy) list of what drugs that insurer is willing to pay for, and at what price. When a person covered by the insurance purchases a drug listed on the formulary, the purchase price is covered by the insurer at the pre-established rates.

Formularies exist both in countries with private medical insurance, like the United States, and with government-controlled national insurance coverage, such as the United Kingdom (and to a lesser extent Canada). Formularies maintained by private corporations are used to determine whether a patient will be compensated for their medical costs, and to what extent.

Formularies maintained by public entities are used in a similar fashion, except that when drugs are not listed on the formularies in countries with public insurance, it may be difficult to get them even privately. For instance, in most provinces in Canada, catastrophic drugs (such as new cancer therapies) that are always administered in hospital cannot be purchased privately; thus, in those few instances when new drugs are not yet listed on the government’s formulary, it may be difficult or impossible to obtain them without moving to another province or travelling to the United States for private treatment. In Britain, the National Health Service maintains an official list (known informally as the Blacklist) of medications which it will not pay for, and therefore which can only be purchased privately. Private insurance companies may also refuse to provide any compensation for unlisted drugs, or may agree only to pay a lower percentage of the purchase price of drugs not listed on their formulary. 

If you are concerned that a given drug may not be on the formulary of your health insurer (be it a private company or a public institution), the best thing to do is to check the formulary. Many companies and governments now make this information available online. To search for a drug, you may need to know its generic name (e.g. rituximab), not just its brand name (e.g. Rituxan). In certain cases insurers will cover a price listed in their formulary even if an insured person actually paid a higher price at the pharmacy, or will cover the cost of a generic version of the medication when more expensive brand-name equivalents are available.