What is a drug formulary and what are pharmacy benefit tiers?
A formulary is the list of medications for which a health insurance plan pays. Most health plans that pay for prescription drug benefits have pharmacy benefit tiers that group certain medications together for pricing purposes. Brand-name drugs that are usually in the top tier are the most expensive, while generic medications are in the lower tiers and are the least expensive. Your prescription drug co-pay for a medication in the lowest tier may range from $5 to $10, while your co-pay for drugs in the highest tier may range from $25 to $50. Most health plans have three or four pharmacy benefit tiers, but some have several tiers.
