What Is a Formulary Brand?

Co-payment is determined by the formulary tier of the medication.

A formulary is a list of generic and name-brand prescription medications that a health insurance plan will cover. Each health insurance company maintains its own formulary list. Formulary lists are generally grouped into three tiers.

Generic Drugs

Tier one formulary medications generally includes generic medications, which usually have the lowest co-payment.

Preferred Name-Brand Drugs

Tier two medications include preferred name-brand medications and have a higher co-payment than tier one formulary medications but lower than tier three drugs.

Non-Preferred Name-Brand Drugs

Tier three formulary medications include non-preferred name-brand medications and have the highest co-payment. Medications are generally in the tier three formulary because there is a similar drug on a lower tier formulary that provides patients the same benefit but at a lower cost. Medications which are new and not yet proven to be effective or safe are also generally in the tier three formulary.

Non-Formulary Drugs

Health plans may also maintain a list of medications that are not covered. Non-formulary medications include over-the-counter medications, experimental medications and lifestyle drugs such as those used for weight loss. Consumers pay the full retail price for non-formulary medications.

References

• Medicare Matters: What Is a Drug List, or Formulary?

Resources

• Medicare.gov: Medicare Plans and Formularies
• Fingertip Formulary