Drug formularies are pivotal tools for delineating and directing prescribing to the "drugs of choice." Full realization of their potential has been hampered by insufficient comparative data on drug efficacy/safety and local resources for formulary development. However, misconceptions concerning fundamental formulary concepts pose an even more formidable obstacle. This article identifies statements illustrating formulary misconception a) made by physicians attending Pharmacy and Therapeutics Committee meetings during a three-year period and b) appearing in published sources. The paper highlights basic objectives and operational requirements of an effective formulary, and contrasts this definition with 20 myths and misinformation culled from these two sources. Not only does such misinformation impair formulary development, many critics are so preoccupied with alleged shortcomings that progress in minimizing the real limitations of formularies has been impeded.