CA Health & Safety Code Section 1367.41


Commencing January 1, 2017, a health care service plan shall maintain a pharmacy and therapeutics committee that shall be responsible for developing, maintaining, and overseeing any drug formulary list. If the plan delegates responsibility for the formulary to any entity, the obligation of the plan to comply with this chapter shall not be waived.


The pharmacy and therapeutics committee board membership shall conform with both of the following:


Represent a sufficient number of clinical specialties to adequately meet the needs of enrollees.


Consist of a majority of individuals who are practicing physicians, practicing pharmacists, and other practicing health professionals who are licensed to prescribe drugs.


Members of the board shall abstain from voting on any issue in which the member has a conflict of interest with respect to the issuer or a pharmaceutical manufacturer.


At least 20 percent of the board membership shall not have a conflict of interest with respect to the issuer or any pharmaceutical manufacturer.


The pharmacy and therapeutics committee shall meet at least quarterly and shall maintain written documentation of the rationale for its decisions regarding the development of, or revisions to, the formulary drug list.


The pharmacy and therapeutics committee shall do all of the following:


Develop and document procedures to ensure appropriate drug review and inclusion.


Base clinical decisions on the strength of the scientific evidence and standards of practice, including assessing peer-reviewed medical literature, pharmacoeconomic studies, outcomes research data, and other related information.


Consider the therapeutic advantages of drugs in terms of safety and efficacy when selecting formulary drugs.


Review policies that guide exceptions and other utilization management processes, including drug utilization review, quantity limits, and therapeutic interchange.


Evaluate and analyze treatment protocols and procedures related to the plan’s formulary at least annually.


Review and approve all clinical prior authorization criteria, step therapy protocols, and quantity limit restrictions applied to each covered drug.


Review new United States Food and Drug Administration-approved drugs and new uses for existing drugs.


Ensure that the plan’s formulary drug list or lists cover a range of drugs across a broad distribution of therapeutic categories and classes and recommended drug treatment regimens that treat all disease states and do not discourage enrollment by any group of enrollees.


Ensure that the plan’s formulary drug list or lists provide appropriate access to drugs that are included in broadly accepted treatment guidelines and that are indicative of general best practices at the time.


This section shall be interpreted consistent with federal guidance issued under paragraph (3) of subdivision (a) of Section 156.122 of Title 45 of the Code of Federal Regulations. This section shall apply to the individual, small group, and large group markets.
Last Updated

Aug. 19, 2023

§ 1367.41’s source at ca​.gov