Drug Formulary

What is a drug formulary?

A drug formulary lists generic and brand-name prescription medications covered under a patient’s health plan. 

A team of medical professionals approves all drugs on a health plan’s formulary based on quality, safety, and cost-effectiveness. 

Drug formularies are updated annually but may be changed throughout the year based on new medications or FDA safety concerns. 

What role does a drug formulary play in healthcare?

A health plan usually helps to pay only for drugs included in the drug formulary. This enables the health plan to offer a wide range of medications at the lowest possible cost. 

The health plan will dictate how much is paid for the drugs through a copay. In some cases, health insurance may completely cover the cost of the drugs. 

How is a drug formulary divided? 

Drug formularies are often divided into multiple tiers, with different medications included in each one. For example, Tier 1 drugs are often generic and have low copays, while Tier 3 drugs may consist of generics, preferred brands, and non-preferred brands with a higher copay. New drugs are often placed in higher tiers. 

The tiers will vary based on the health insurance policy, and the drugs offered in each tier will also differ based on the policy.