What is meant by the term formulary?

The term "formulary" refers to a comprehensive list of medications that are approved for reimbursement by a specific health plan or insurance provider. This list is critically important as it dictates which medications are covered under a patient's insurance policy, often influencing the cost-sharing responsibilities for both patients and providers.

The formulary is typically organized by categories or tiers, indicating which drugs are preferred and which may have higher co-pays or may require prior authorization. This influences prescribing practices, as healthcare providers often utilize the formulary to ensure that they are prescribing medications that are both effective and financially accessible for patients.

This is distinct from other options, as a record of all medications available in pharmacies describes an inventory system rather than a reimbursement context. A guideline for medication dosage is concerned with the proper administration of drugs, while a report on medication side effects deals with safety and efficacy information rather than reimbursement logistics. Thus, the definition of formulary aligns specifically with the insurance or reimbursement function it serves within the healthcare system.