Rising prescription drug costs, especially for specialty and high-cost medications, have made formulary management, and specifically utilization management (UM) strategies, an important tool in controlling pharmacy benefit spend while maintaining quality care.
While cost savings are a key objective, UM strategies also aim to ensure appropriate medication use, enhance patient safety, and align with evidence-based guidelines.
In this guide, we’ll break down each of the three most common UM strategies, outlining how they work, what benefits they offer, and what to consider during implementation and monitoring.
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What’s inside the Guide to Utilization Management in Pharmacy Contracts eBook?
Foundations of UM
Understand how effective programs balance clinical appropriateness, cost control, and member experience.
Prior Authorization
See how PA decisions are made, what turn-around time and approval metrics to monitor, and how to reduce administrative friction for providers and members.
Step Therapy
Learn when step edits make sense, how to communicate criteria, and what reporting helps you measure disruption, appeals, and clinical outcomes.
Quantity Limits
Review how quantity caps are set, what exception processes should look like, and how to avoid overly restrictive limits that drive unnecessary appeals.
Strategic Evaluation Across the Contract Lifecycle
Consider a three-phase framework to align UM at procurement, mid-contract, and at renewal, with contract protections and apples-to-apples PBM vendor comparisons.
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