"A closed formulary is a list of drugs with an associated reimbursement status. For example, the Official Disability Guidelines (ODG)—adopted by Texas in 2011, Oklahoma in 2014, and Arizona and Tennessee in 2016—has statuses “Y” for preauthorized for use and “N” for not allowed or needs authorization. On average, 24% of drug costs and 17% of prescriptions in a service year are for N drugs. The intent of formularies is to use evidence‐based guidelines to reduce over‐prescribing (of opioids, in particular), to maximize healing, to improve return‐to‐work outcomes, and to contain drug costs. Exhibit 4 shows NCCI’s estimates for potential drug cost savings from the ODG formulary for a number of states. In many states, the introduction of the ODG formulary has the potential to reduce WC prescription drug costs by 10% or more. As evidence‐based guidelines tend to be more restrictive when dealing with opioids, states with higher opioid use tend to produce the largest estimated savings."