Tips for Reading Your Prescription Drug Formulary
www.Medtipster.com Source: Navitus Clinical Blog, 6.24.14
The term “formulary” is often used in health insurance materials, but many people may not know what it means. In truth, a formulary is simply an elaborate word for a list of preferred drugs covered by your plan.
Perhaps even fewer people understand how to read a formulary. We have provided some questions and answers below that will help you interpret your formulary.
Which drugs are covered?
The drugs listed on your formulary are the ones covered by your plan. Your formulary is also available to your physician. It is always good practice for you to keep track of your formulary so that you are aware of which drugs have the lowest copay.
How do I know what my copay is?
The copay level for each medication is shown on your formulary. Please note that your formulary does not show the dollar amount you pay for each medication.
Tiering 101
You may have heard the term “tiers” in relation to formularies. Here is how they work. The lower tiers (e.g., Tier 1) include the preferred drugs – and those preferred drugs typically have lower copays. To keep your expenses down, you should try to take drugs that are on lower, preferred tiers and avoid drugs in the higher, non-preferred or non-formulary tiers.
Typically, the format of a formulary includes three tiers of coverage.
- Tier 1 – includes mostly generic drugs
- Tier 2 – typically formulary brand name drugs
- Tier 3 – in general, non-formulary brand name drugs
Why aren’t certain drugs added to the formulary?
The formulary is a list of preferred drugs. They were selected because they are safe, effective, and have better value compared to other more expensive drugs. Additions, exclusions and coverage changes to your formulary are made at the discretion of a committee of prescribers and pharmacists. This committee first reviews drugs based on therapeutic value, effectiveness and side effects. Then the committee determines which drugs are comparable and lastly considers cost. The goal is to provide the best quality medications at the best value. Ongoing review of new and existing prescription drugs ensures the formulary is up-to-date, and meets patient health care needs.
Some drugs on the formulary have PA, ST or QL listed after them. What does that mean?
- PA means that drug requires a Prior Authorization to be covered. A PA might be required for those drugs that require special consideration, such as needing specialist review or an approved test.
- ST means the drug is subject to step therapy. This means the drug will be covered only after you have tried other drugs and they have failed. You may need to first try a safe and more cost-effective drug before moving to a more costly treatment.
- QL means the drug is subject to quantity limits.
What is the difference between generic drugs and brand-name drugs?
A generic drug is a drug that is the same as a brand-name drug in dosage, safety and strength. It is also the same in how it is taken, how it works in the body, quality, performance and intended use.
The Food and Drug Administration reviews all generic drugs. They use the same strict criteria used for approval of brand-name medications, requiring generic drugs to have the same quality and performance as brand-name drugs.
Typically, generic drugs are less expensive than their brand counterparts. They can save you money by reducing copays or, in the case of over-the-counter drugs, reducing out-of-pocket expense at the cash register.
We hope the tips provided above will help you read and understand your formulary. Sometimes, just knowing a few bits of information can take you a long way in realizing the full potential of your pharmacy benefits.
The ultimate pharmacy search engine for discounted generic drug programs available at pharmacies throughout the USA.