At its most basic level, a
formulary is a list of
medicines. Traditionally, a formulary contained a collection of formulas for the
compounding and testing of medication (a resource closer to what would be referred to as a
pharmacopoeia today). Today, the main function of a prescription formulary is to specify particular medications that are approved to be
prescribed at a particular
hospital, in a particular
health system, or under a particular
health insurance policy. The development of prescription formularies is based on evaluations of efficacy, safety, and
cost-effectiveness of drugs.