The document defines a hospital formulary as a compilation of pharmaceuticals and important information that reflects the current clinical judgement of medical staff. It discusses the origins of hospital formularies in India in 1968 and 1997. The need for formularies is explained as being due to the increasing number of new drugs, complex drug effects, and interest in lower healthcare costs. Advantages include improved quality, cost reduction, and education. Disadvantages can include restricting physician choice and allowing inferior drugs. The document outlines the process for preparing a formulary including necessary information, guidelines, and components. It emphasizes the role of the pharmacy and therapeutics committee in developing policies to select and use medications optimally.