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Drug Formulary Management Market

Drug Formulary Management Market Share & Trends Analysis Report, By Type (Open Formulary, Closed Formulary, and Controlled Formulary), By Application Type (Hospital Formulary Management and Managed Care Organization (MCO) Formulary Management), By Region, and Segment Forecasts, 2023-2031

Report ID : 2532 | Published : 2024-06-24 | Pages: 180 | Format: PDF/EXCEL

Drug Formulary Management Market Size is predicted to grow at a 5.9% CAGR during the forecast period for 2024-2031.

Drug Formulary Management Market info

Drug formulary management is a system used in healthcare to ensure that patients are prescribed the safest, most effective, and most affordable medications. It's essentially a list of approved medications that a healthcare organization, like a hospital or insurance plan, recommends for use by doctors. This list is based on scientific evidence, expert opinions, and cost considerations. A committee of healthcare professionals, typically pharmacists and physicians, oversee the formulary. A group of healthcare professionals, including physicians, pharmacists, and other experts, reviews and evaluates clinical data to make informed decisions on which drugs should be included in the formulary.

This committee, known as the Pharmacy and Therapeutics (P&T) committee, ensures that the formulary reflects current best practices and clinical guidelines. By carefully assessing the safety, efficacy, and cost-effectiveness of medications, they maintain a formulary that supports optimal patient care while promoting consistency and standardization in prescribing practices within the healthcare organization. By promoting the use of safe and effective medications, drug formulary management helps ensure patients receive the best possible treatment. By focusing on cost-effective options, it can help control healthcare spending, making high-quality care more accessible and sustainable. Additionally, formulary management ensures consistency in prescribing practices within a healthcare organization, leading to standardized care that aligns with the latest clinical guidelines and evidence-based practices.

The increasing cost of healthcare services and medications drives the need for efficient formulary management to control expenses and ensure affordability for patients and healthcare systems. There is a growing emphasis on cost-effective treatment options. Formulary management helps in identifying and promoting the use of generic and biosimilar drugs, which are often less expensive alternatives to brand-name medications.

Competitive Landscape

Some of the Major Key Players in the Drug Formulary Management Market are

  • FDB (First Databank)
  • Evernorth Health, Inc.
  • Wolters Kluwer Medi-Span
  • Academy of Managed Care Pharmacy
  • McKesson
  • Salesforce
  • Pharmacy Purchasing & Products
  • VativoRx
  • Nuwae
  • MedReb8
  • Other Companies

Market Segmentation:

The Controlled Formulary Segment Dominate the Market

Based on the by type, the market divided into open formulary, closed formulary, and controlled formulary. Among these, the controlled formulary segment dominates the market. A controlled formulary strikes a balance between open and closed formularies. It includes a tiered structure where certain drugs are preferred and covered at different levels, incorporating utilization management tools like prior authorization and step therapy. Controlled formularies tend to be dominant in the market overall, as they offer a compromise between cost containment and flexibility. They are widely used by private insurers, large health systems, and pharmacy benefit managers (PBMs) to manage costs while maintaining a degree of flexibility for physicians and patients.

The Managed Care Organization (MCO) Formulary Management Segment is Expected to have the highest growth rate during the forecast period

The by application type categorized into hospital formulary management and managed care organization (MCO) formulary management. Among these, the managed care organization (MCO) formulary management segment is expected to have the highest growth rate during the forecast period. MCOs cover a wide array of settings, including outpatient, inpatient, and pharmacy services, leading to broader adoption and integration of formulary management practices. This comprehensive coverage across various aspects of healthcare has driven a significant rise in enrollment in managed care plans, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), fueled by both government programs (Medicare and Medicaid) and private insurers.

North America Led the Drug Formulary Management Market

North America has a large and diverse pharmaceutical market, with extensive research and development activities, leading to a wide range of medications available for inclusion in formularies. Moreover, stringent regulatory frameworks and guidelines ensure the safety, efficacy, and cost-effectiveness of drugs included in formularies, enhancing confidence in their utilization. The region's focus on cost containment, coupled with a growing emphasis on value-based care models, further drives the adoption of formulary management strategies to optimize healthcare spending while ensuring quality patient care.

Recent Developments:

  • In May 2023, the two group buying organizations (GPOs) that handle prescription rebate negotiations on behalf of other PBMs were subject to mandatory directives from the Federal Trade Commission (FTC). The FTC also said that it is still looking into pharmacy benefit managers (PBMs) and how they affect the affordability and accessibility of prescription drugs. These orders, which demanded extensive documentation and information on Zinc Health Services, LLC and Ascent Health Services, LLC's business procedures, were given to both companies. The FTC's mandatory directives to the six biggest PBMs in the US healthcare market were followed by this action. These PBMs, which are frequently a component of vertically integrated businesses, acted as middlemen in the negotiations of fees and rebates with pharmaceutical firms, the creation of drug formularies, and the payment of pharmacies for filling prescriptions for patients.
  • In Sept. 2022,Evernorth, Cigna Corporation's health services division has added five new app-based programs to its Digital Health Formulary to assist individuals in managing their inflammatory illnesses, anxiety, alcohol and opioid use disorders, and sleep problems. Evernorth's Digital Health Formulary is a clinically based platform of verified, reliable health apps in a busy digital health industry that helps people reach their health goals.

Drug Formulary Management Market Report Scope

Report Attribute

Specifications

Growth Rate CAGR

CAGR of 5.9% from 2024 to 2031

Quantitative Units

Representation of revenue in US$ Bn and CAGR from 2024 to 2031

Historic Year

2019 to 2023

Forecast Year

2024-2031

Report Coverage

The forecast of revenue, the position of the company, the competitive market structure, growth prospects, and trends

Segments Covered

By Type, By Application Type

Regional Scope

North America; Europe; Asia Pacific; Latin America; Middle East & Africa

Country Scope

U.S.; Canada; U.K.; Germany; China; India; Japan; Brazil; Mexico; The UK; France; Italy; Spain; China; Japan; India; South Korea; Southeast Asia; South Korea; South East Asia

Competitive Landscape

FDB (First Databank), Evernorth Health, Inc., Wolters Kluwer Medi-Span, Academy of Managed Care Pharmacy, McKesson, Salesforce Pharmacy Purchasing & Products, VativoRx, Nuwae, MedReb8, Other Companies

Customization Scope

Free customization report with the procurement of the report, Modifications to the regional and segment scope. Particular Geographic competitive landscape.

Pricing and Available Payment Methods

Explore pricing alternatives that are customized to your particular study requirements.

Chapter 1. Methodology and Scope

1.1. Research Methodology

1.2. Research Scope & Assumptions

Chapter 2. Executive Summary

Chapter 3. Global Drug Formulary Management Market Snapshot

Chapter 4. Global Drug Formulary Management Market Variables, Trends & Scope

4.1. Market Segmentation & Scope

4.2. Drivers

4.3. Challenges

4.4. Trends

4.5. Investment and Funding Analysis

4.6. Industry Analysis – Porter’s Five Forces Analysis

4.7. Competitive Landscape & Market Share Analysis

4.8. Impact of Covid-19 Analysis

Chapter 5. Market Segmentation 1: by Type Estimates & Trend Analysis

5.1. by Type & Market Share, 2019 & 2031

5.2. Market Size (Value (US$ Mn) & Forecasts and Trend Analyses, 2019 to 2031 for the following by Type:

5.2.1. Open Formulary

5.2.2. Closed Formulary

5.2.3. Controlled Formulary

Chapter 6. Market Segmentation 2: by Application Type Estimates & Trend Analysis

6.1. by Application Type & Market Share, 2019 & 2031

6.2. Market Size (Value (US$ Mn) & Forecasts and Trend Analyses, 2019 to 2031 for the following by Application Type:

6.2.1. Hospital Formulary Management

6.2.2. Managed Care Organization (MCO) Formulary Management

Chapter 7. Drug Formulary Management Market Segmentation 3: Regional Estimates & Trend Analysis

7.1. North America

7.1.1. North America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Type, 2024-2031

7.1.2. North America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Application Type, 2024-2031

7.1.3. North America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by country, 2024-2031

7.2. Europe

7.2.1. Europe Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Type, 2024-2031

7.2.2. Europe Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Application Type, 2024-2031

7.2.3. Europe Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by country, 2024-2031

7.3. Asia Pacific

7.3.1. Asia Pacific Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Type, 2024-2031

7.3.2. Asia Pacific Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Application Type, 2024-2031

7.3.3. Asia Pacific Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by country, 2024-2031

7.4. Latin America

7.4.1. Latin America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Type, 2024-2031

7.4.2. Latin America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Application Type, 2024-2031

7.4.3. Latin America Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by country, 2024-2031

7.5. Middle East & Africa

7.5.1. Middle East & Africa Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Type, 2024-2031

7.5.2. Middle East & Africa Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by Application Type, 2024-2031

7.5.3. Middle East & Africa Drug Formulary Management Market Revenue (US$ Million) Estimates and Forecasts by country, 2024-2031

Chapter 8. Competitive Landscape

8.1. Major Mergers and Acquisitions/Strategic Alliances

8.2. Company Profiles

8.2.1. FDB (First Databank)

8.2.2. Evernorth Health, Inc.

8.2.3. Wolters Kluwer Medi-Span

8.2.4. Academy of Managed Care Pharmacy

8.2.5. McKesson

8.2.6. Salesforce

8.2.7. Pharmacy Purchasing & Products 

8.2.8. VativoRx

8.2.9. Nuwae

8.2.10. MedReb8

8.2.11. Other Companies

Segmentation of Drug Formulary Management Market

Global Drug Formulary Management Market – By Type

  • Open Formulary
  • Closed Formulary
  • Controlled Formulary

Drug Formulary Management Market seg

Global Drug Formulary Management Market – By Application

  • Hospital Formulary Management
  • Managed Care Organization (MCO) Formulary Management

Global Drug Formulary Management Market – By Region

North America-

  • The US
  • Canada
  • Mexico

Europe-

  • Germany
  • The UK
  • France
  • Italy
  • Spain
  • Rest of Europe

Asia-Pacific-

  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific

Latin America-

  • Brazil
  • Argentina
  • Rest of Latin America

 Middle East & Africa-

  • GCC Countries
  • South Africa
  • Rest of the Middle East and Africa

InsightAce Analytic follows a standard and comprehensive market research methodology focused on offering the most accurate and precise market insights. The methods followed for all our market research studies include three significant steps – primary research, secondary research, and data modeling and analysis - to derive the current market size and forecast it over the forecast period. In this study, these three steps were used iteratively to generate valid data points (minimum deviation), which were cross-validated through multiple approaches mentioned below in the data modeling section.

Through secondary research methods, information on the market under study, its peer, and the parent market was collected. This information was then entered into data models. The resulted data points and insights were then validated by primary participants.

Based on additional insights from these primary participants, more directional efforts were put into doing secondary research and optimize data models. This process was repeated till all data models used in the study produced similar results (with minimum deviation). This way, this iterative process was able to generate the most accurate market numbers and qualitative insights.

Secondary research

The secondary research sources that are typically mentioned to include, but are not limited to:

  • Company websites, financial reports, annual reports, investor presentations, broker reports, and SEC filings.
  • External and internal proprietary databases, regulatory databases, and relevant patent analysis
  • Statistical databases, National government documents, and market reports
  • Press releases, news articles, and webcasts specific to the companies operating in the market

The paid sources for secondary research like Factiva, OneSource, Hoovers, and Statista

Primary Research:

Primary research involves telephonic interviews, e-mail interactions, as well as face-to-face interviews for each market, category, segment, and subsegment across geographies

The contributors who typically take part in such a course include, but are not limited to: 

  • Industry participants: CEOs, CBO, CMO, VPs, marketing/ type managers, corporate strategy managers, and national sales managers, technical personnel, purchasing managers, resellers, and distributors.
  • Outside experts: Valuation experts, Investment bankers, research analysts specializing in specific markets
  • Key opinion leaders (KOLs) specializing in unique areas corresponding to various industry verticals
  • End-users: Vary mainly depending upon the market

Data Modeling and Analysis:

In the iterative process (mentioned above), data models received inputs from primary as well as secondary sources. But analysts working on these models were the key. They used their extensive knowledge and experience about industry and topic to make changes and fine-tuning these models as per the product/service under study.

The standard data models used while studying this market were the top-down and bottom-up approaches and the company shares analysis model. However, other methods were also used along with these – which were specific to the industry and product/service under study.

To know more about the research methodology used for this study, kindly contact us/click here.

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Frequently Asked Questions

What is the Drug Formulary Management Market Growth?

Evernorth Health, Inc., Wolters Kluwer Medi-Span, Academy of Managed Care Pharmacy, McKesson, Salesforce Pharmacy Purchasing & Products, VativoRx, Nuw

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