Final answer:
A formulary in the NCM context is a covered list of prescription drugs by health insurance, based on drug effectiveness, safety, and cost-efficiency. It includes both generic and brand-name medications, often organized into cost tiers.
Step-by-step explanation:
A formulary in the context of the National Committee for Quality Assurance (NCQA) is a list of prescription drugs that are covered by a health insurance plan or another type of welfare healthcare system. The formulary is developed based on the efficacy, safety, and cost-effectiveness of drugs. It typically includes both generic and brand-name prescription medications and may be divided into tiers representing different cost levels for the insured patient. Formularies are essential for managing drug cost and utilization, ensuring that patients have access to the medications they need while controlling expenditures. These lists are often subject to revision as new drugs become available and as existing treatments are reevaluated for safety and efficacy.