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Formulary rationalisation: the quiet 20–40% in class-level tender lots

How to move interchangeable drug classes — PPIs, ARBs, statins, cephalosporins — from brand-by-brand buying to a single class-level lot with clinical sign-off, and what the P&T committee needs to see.

By the Consulting Wallah team · 28 Oct 2026 · 6 min read

Walk through a hospital pharmacy store and count the proton-pump inhibitors: omeprazole, pantoprazole, esomeprazole, rabeprazole, often in two brands each. Each one is a tender line, a stock line, a reorder point and a price. Clinically, for most indications, they are interchangeable. Commercially, you are paying for the privilege of not choosing.

Where the money is

Class-level tendering means the hospital tenders for “a proton-pump inhibitor, oral 20/40 mg and IV 40 mg, estimated annual volume X”, and lets suppliers compete across molecules. The winning molecule becomes the formulary default; the others stay available on restriction. In our experience the saving on the category is 20–40%, with the larger figure where the previous mix was brand-heavy. The same logic applies to ARBs, statins, third-generation oral cephalosporins, second-generation antihistamines, inhaled corticosteroid combinations and low-molecular-weight heparins (where biosimilars exist).

What the P&T committee needs

  • A short list, not a blank page. Bring the class, the molecules, the current consumption and spend by molecule, and the candidate default. The Drug & Alternatives Look-up gives you the class members and notes in seconds.
  • The exceptions written down. Which patients stay on the non-default molecule (paediatric formulations, specific interactions, documented intolerance) and how a prescriber requests it.
  • Registration and supply evidence. Every candidate registered with the authority, two sources of supply, shelf life on delivery ≥ 12 months.
  • The switch plan. Run-down of existing stock, HIS order-set changes, a one-page clinician note, and a 90-day review of adverse events and complaints.

Where not to do it

Narrow-therapeutic-index drugs (levothyroxine, warfarin, phenytoin, tacrolimus, lithium) are not candidates for brand switching without clinical monitoring. Modified-release products with different release profiles are not interchangeable. Biologics follow a separate biosimilar-switch policy with pharmacovigilance. The look-up flags these.

Sequence for a group

Start with the two or three classes with the largest spend and the least clinical sensitivity — PPIs, statins, ARBs. Tender them as class lots in the next cycle. Report the saving reconciled to the ledger. Then extend. Groups that do this across ten classes typically take 8–12% off total drug spend within 18 months without touching a single high-cost specialty line.

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