TABLE 2.

Examples of Payer Considerations in Formulary Development

Theme	Examples of considerations	Description
Population	Age, sex, ethnicity, social determinants of health	Makeup of each payer’s membership will differ and may impact coverage decisions to ensure equitable care.
Regional	Distance to care, access to quality care, cultural differences	Access to care and unique expectations based on location (rural vs urban) can require formulary and benefit designs to accommodate patient needs.
Regulatory/compliance	State-driven mandates, Medicare requirements, quality reporting	Federal and state mandates may affect formulary design. Payers may have financial incentives tied to specific outcomes.
Benefit design	Comprehensive coverage, carveout, medical coverage alignment, tiering, networks	Payers can create a unique benefit design by leveraging multiple vendor partners (pharmacy or medical carveout), unique patient benefits (copay vs coinsurance), and access to care (open vs narrow networks).