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What is a formulary and a P&T committee?

Also called: Formulary Placement & P&T Committee, pharmacy and therapeutics committee, drug formulary

A formulary is the list of drugs a hospital or health plan covers or prefers. The pharmacy and therapeutics (P&T) committee, made up of physicians and pharmacists, decides which drugs are added, removed or restricted.

By John Britton, VP of Marketing, MedicalProspects · Updated November 4, 2026 · Healthcare Organizations

Why it matters for healthcare sales and marketing

A drug that isn't on formulary is hard for clinicians to prescribe and for patients to get covered. Pharma companies therefore work to secure formulary access with health plans and hospitals, which involves P&T committees, pharmacy directors and market access teams.

How it works

  • Health plan formularies often use tiers that set patient cost-sharing, and may require prior authorization or step therapy.
  • Hospital formularies decide which drugs the pharmacy stocks and how they're used.
  • P&T committees review clinical evidence, safety and cost, and recommend formulary decisions.
  • Key contacts: pharmacy directors, clinical pharmacists, P&T members and plan pharmacy leaders.
Flow: a drug is submitted, the P&T committee reviews evidence, safety and cost, decides on formulary status, and the tier or restrictions are set.
P&T committees review evidence, safety and cost before adding a drug to a formulary.

Example

Illustrative scenario. Before launch, a specialty pharma company's market access team prepares evidence packages for health plan P&T reviews, while its hospital team reaches pharmacy directors and clinical pharmacists at target health systems.

Common mistakes

  • Marketing to prescribers before access. Without coverage, demand stalls.
  • Ignoring hospital formularies. Inpatient use needs hospital P&T approval.
  • Bringing only clinical data. Committees also weigh cost and budget impact.

Related terms

  • Medical AffairsMedical affairs is the scientific function in a pharmaceutical, biotech or MedTech company that shares clinical and scientific information with healthcare professionals, separate from sales and marketing. Medical science liaisons (MSLs) are its field team.
  • Payer vs ProviderIn healthcare, payers pay for care and providers deliver it. Payers include commercial health plans, Medicare, Medicaid and self-insured employers; providers include hospitals, physician practices, clinics and other care settings.
  • HCP Reference DataHCP reference data is the master list of healthcare professionals and organizations, with stable IDs and affiliations, that a life sciences company uses as the single source of truth in its CRM, sales operations and compliance reporting.
  • Key Opinion Leader (KOL)A key opinion leader (KOL) is a clinician whose expertise and reputation shape how peers practice, for example through research, publications, guideline committees, teaching and conference talks.
  • 340B Drug Pricing ProgramThe 340B Drug Pricing Program is a U.S. federal program that requires drug manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to eligible safety-net providers, called covered entities, such as certain hospitals and federally qualified health centers. It is administered by HRSA.

Put it to work

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