Formulary and drug tiers

What is a formulary?

A formulary is the list of prescription drugs covered by a Part D plan. Each plan has its own formulary, which is why the same drug might be covered by one plan but not another — or placed on different cost tiers.

All Part D plans are required by Medicare to cover a wide range of drugs in each therapeutic category, but the specific drugs they choose to include can vary.

Understanding drug tiers

Drugs on a formulary are organized into tiers, which determine how much you pay. Most plans use a 5-tier system:

Tier	Type	Typical cost
Tier 1	Preferred generic	Lowest copay ($0–$15)
Tier 2	Generic	Low copay ($5–$20)
Tier 3	Preferred brand-name	Moderate copay or coinsurance
Tier 4	Non-preferred brand-name	Higher coinsurance (30–40%)
Tier 5	Specialty	Highest coinsurance (25–33%)

What if your drug isn't on the formulary?

If a drug you take isn't covered by your plan, you have several options:

1. Request a formulary exception — ask your plan to cover the drug, with support from your doctor
2. Request a tier exception — ask to have the drug moved to a lower, less expensive tier
3. Ask your doctor about alternatives — a covered drug in the same therapeutic class may work for you
4. Switch plans — during open enrollment, find a plan that covers your drug
5. File an appeal — if your exception request is denied, you can appeal the decision

Formulary restrictions

Some drugs on the formulary have additional restrictions:

• Prior authorization — your plan must approve the prescription before it's filled
• Step therapy — you must try a less expensive drug first before the plan covers the requested drug
• Quantity limits — the plan limits how much of the drug you can get at one time