An approved list of prescription drugs; a list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost effective for patient care. organisations often develop a formulary under the aegis of a pharmacy and therapeutics committee. When used by hospitals or clinics, a formulary is intended as a recommendation usually and not considered a requirement. However, when used In HMOs or Prescription Drug Plans, such as Medicare Part D Plans, physicians are often required to prescribe from the formulary. If a physician prescribes a drug not on the formulary, the patient may not be able to experience any discount or reimbursement for the expense. Formularies are supposed to be based on evaluations of efficacy, safety, and cost-effectiveness of drugs, but increasingly formularies are based on cost and expense factors. Patients pay varying co-pays for drugs that are on formulary. For drugs that are not on formulary, patients must pay the entire cost of the drug. Formularies vary between drug plans and differ in the breadth of drugs covered and costs of co-pay and premiums. Most formularies cover at least one drug in each drug class, and encourage generic substitution. A list of drugs covered by a plan. Also known as a preferred drug list. See also Tiered Formulary or Prescription Drug Plan.