BackgroundDrug formularies, initially designed to promote the use of cost-effective generic drugs are now designed to maximize financial benefits for the pharmacy benefit management companies that negotiate drug purchase prices. In the largest publicly available formulary, 55% of mandated substitutions are not for generic versions of the same active ingredient and/or formulation and may not be medically or financially beneficial to patients.MethodsWe modeled the effect of excluding novel agents for atrial fibrillation/venous thromboembolism, migraine prevention, and psoriasis, which all would require substitution with a different active ingredient. Using population data, market share of the two largest U.S. formularies, and 2021 prescription data, we calculated how many people could be affected by such exclusions. Using data from the published literature, we calculated how many of those individuals are likely to discontinue treatment and/or have adverse events due to a formulary exclusion.ResultsThe number of people likely to have adverse events due to the exclusion could be as high as one million for atrial fibrillation/venous thromboembolism, 900,000 for migraine prevention, and 500,000 for psoriasis. The numbers likely to discontinue treatment for their condition are as high as 924,000 for atrial fibrillation/venous thromboembolism, 646,000 for migraine, and 138,000 for psoriasis.ConclusionSubstitution with a nonequivalent treatment is common in formularies currently in use and is not without substantial consequences for hundreds of thousands of patients. Forced drug substitution results in costly increases in morbidity and mortality and should be part of the cost-benefit analysis of any formulary exclusion.