Concept:
The Pharmacy and Therapeutics Committee is responsible for safe, effective, and rational use of medicines in hospitals.
Step 1: Meaning of formulary.
A formulary is an approved list of medicines used in a hospital or healthcare institution.
Step 2: Role of committee.
The committee evaluates medicines based on safety, efficacy, cost, and need.
Step 3: Monitoring function.
It also monitors medicine use and updates the formulary when required.
Step 4: Final answer.
Therefore, the most important function is to select and monitor medicines for formulary.
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\boxed{\text{Select and monitor medicines for formulary}}
\]