Workers’ Compensation is a program directed at workers injured on the job in certain states to receive medical benefits and lost wages. The medical benefits cover expenses like doctor’s visits, x-rays, blood-work, and prescriptions. Prescriptions tend to be a very costly for those receiving Workers’ Compensation. On the other hand, lost wages can present fiscal challenges as well. Injuries vary in severity and time missed from work. A worker who gets a laceration may be out for a week; compare this to someone who injuries their back and is out for years. In order to combat these unpredictable costs, health practitioners form drug formularies.

Drug Formularies seek to discover and keep record of the most cost-effective drugs that treat the same conditions. There are different tiers of reimbursement. For example, a tier 1 drug may only cost $15; tier 2 $50; and tier 3 could be $200. (These are made up figures used to illustrate a point.) Sometimes the tier 2 drug works better than the tier 1 drug, therefore it may be beneficial to spend the extra money in order to receive better treatment. These Formularies ensure a given population keeps track of the most cost effective medication with the greatest efficacy.