ORGANIZATION: University of California San Diego Medical Center (UCSDMC) is a 548 bed academic medical center with an average daily census of 368 patients and 23,000 annual discharges. UCSDMC has a large regional footprint as it is the only academic medical center in the region and serves as the regions burn center and high risk obstetrics and neonatal care center. In addition, UCSDMC was the regions first level 1 trauma unit. Consequently, patients are admitted to UCSDMC with a wide variety of medications and insurance coverage. From a medication safety standpoint, outpatient maintenance medication is generally not substituted in our hospital. In addition, patients are discouraged to bring their own medication into the hospital to assure the quality of the medications. These patient population and policy characteristics make formulary management particularly challenging, as this practice results in a constant baseline use of nonformulary outpatient maintenance medications in our inpatient patient population. PROBLEM OR ISSUE ADDRESSED: Detecting trends in nonformulary prescribing is important as increased use of nonformulary medications could indicate an important clinical need of this medication. On the other hand, increased use of nonformulary medications in therapeutic areas with equivalent but less expensive formulary medications, leads to increased costs. We hypothesized that analyzing trends in nonformulary prescribing leads to detection of irrational and more expensive, nonformulary medications and therefore to cost savings. GOALS: To address these issues, we developed a nonformulary medication use monitoring system designed to improve formulary adherence by 50% and detect irrational nonformulary use at an early stage. OUTCOMES ITEMS USED IN THE DECISION: Formulary adherence is defined as the number of nonformulary medication doses billed divided by the total number of doses billed. As an example of irrational prescribing detected by this system, cost savings associated with reversing nonformulary levalbuterol use to formulary albuterol are reported. IMPLEMENTATION STRATEGY: Trends in nonformulary use are monitored using daily, monthly and semi-annual reports. - Daily monitoring is done by the clinical pharmacist. A report that specifies the nonformulary orders per nursing unit is sent to each pharmacist for follow up. The pharmacist evaluates the order for appropriateness and contacts the physician if substitution to a formulary alternative is possible. The intervention is recorded in the pharmacy information system and compliance is monitored by the pharmacoeconomics specialist. - Monthly monitoring is done by the pharmacoeconomics specialist.  The results of this monthly analysis are discussed with the Pharmacist-in-Chief and with the Chair of the P&T Committee. - Semi-annual reporting is done by the pharmacoeconomics specialist. Trends in nonformulary prescribing over a six month period are discussed at the P&T meeting. An action plan is approved to address the findings. RESULTS: The first semi-annual nonformulary prescribing report showed a non-formulary use of 0.26% of billed doses. The most frequently prescribed nonformulary medications were: levalbuterol (bronchodilating agent), latanoprost (ocular glaucoma agent), pentosan (bladder relief agent) and Mg-Al plus (magnesium supplement). Based on this initial report and the lack of formulary alternatives, the P&T committee added the latter three agents to the formulary. However, from a cost savings standpoint, the use of levalbuterol at our institution was discouraged as this agent has no known benefits over our formulary agent albuterol. At the time of the report, levalbuterol was almost 4 times more expensive than albuterol. Collaboration with respiratory therapy and pulmonology was sought to educate prescribers and pharmacists about the therapeutic equivalence of albuterol and levalbuterol. After these interventions, the second semi-annual report showed an 80% decrease of nonformulary use to 0.05% of billed doses . Levalbuterol use decreased by 67% from an average of 24 patients per month in the 6 month period before the intervention to 8 patients after the intervention. Levalbuterol expenditure decreased from $7800 to $1421 over the same period and continues to drop, corresponding to an annualized cost avoidance of $8000. LESSONS LEARNED: This case study shows that in an environment where formulary management is challenging, a nonformulary prescribing monitoring system is successful in decreasing nonformulary prescribing and identifying areas of improvement. The large decrease in use of levalbuterol is only one of the successes resulting from this effort. However, by implementing continuous monitoring of nonformulary prescribing we expect to detect and prevent these excesses in the future. We acknowledge that the monetary savings of decreasing levalbuterol use and nonformulary prescribing as a whole is marginal. However, other benefits of a formulary that is better tailored to the institution’s needs could include better inventory management, improved medication safety and less interruptions of therapy. This will be the focus of a subsequent study.