OBJECTIVES: With the increasing costs of providing pharmaceutical care, hospices in the U.S, are burdened with the high costs of providing optimum healthcare. There is a need to implement cost-containment strategies such as drug formulary at hospices that will aid in curbing pharmacy-related costs. While most hospices do not have a formulary, there are some that have a preferred drug list of most commonly used drugs, however, they lack appropriate methodology for the purpose of including particular drug(s) on the list. To develop rational hospice drug formulary based on scientific methodology. METHODS: This study was conducted at a hospice center located in the rural township of Alabama State. Multi-Attribute Utility Theory (MAUT) methodology was employed to develop a rational hospice drug formulary. MAUT is a systematic identification and analysis method that facilitates the P&T committee in selecting appropriate drugs on the basis of assessing important drug attributes such as efficacy, safety, cost, and dosage-form related parameters. For each therapeutic drug class, members of the P&T committee at the center ranked and weighted their preferences for different drug attributes that were considered most important for final drug selection process. The preference values were combined in a mathematical formula with the literature values that were obtained through comprehensive and systematic literature review process to yield total utility score values for individual drugs. Within each therapeutic class, final decisions to include particular drug on the formulary were made on the basis of total utility scores i.e. those drugs with highest total utility scores were selected for the formulary. RESULTS: The P&T committee at the hospice center successfully developed their drug formulary using MAUT methodology. CONCLUSION: The methods described and employed in this study can be used by P&T committees at other hospices for developing drug formularies at their respective centers.