What is the effect of a formulary on drug utilization?

• A. It steers prescribing toward cost-effective therapies and manages drug costs.
• B. It increases the use of high-cost drugs.
• C. It eliminates all generic drugs.
• D. It has no impact on drug utilization.

Answer: (A)

Formularies guide prescribing toward cost-effective therapies and help manage drug costs by listing preferred medications and using management tools like tiered copays, prior authorization, and step therapy. This structure encourages use of clinically appropriate, often lower-cost options (such as generic drugs) and standardizes spending, which reduces overall drug expenditures while preserving access to necessary treatments. It does not promote higher-cost drugs, nor does it eliminate generics, and it clearly influences how drugs are utilized.