Drug Formulary Definition

A drug formulary is a list of prescription drugs that a Medicare plan will pay for. A formulary includes both generic and name-brand drugs. According to Medicare.gov, "Most prescription drugs used by people with Medicare will be on a plan's formulary."

Most Commonly Prescribed

• A drug formulary is required to include classes of at least two of the most commonly prescribed drugs to individuals with Medicare.

PDP

• Every person with Medicare will be assigned a PDP or prescription drug plan, which is a list of of approved prescription medications and drug stores.

Prior Authorization

• Some drugs that may be excessively priced or have high amounts of side effects may be required to be given prior authorization to ensure they are prescribed correctly and responsibly. The drugs will be covered when a doctor contacts the provider and proves that each contested drug is as Medicare.gov states, "medically-necessary."

Mail-order

• Some plans may offer mail-order options for convenience if your plan is not contracted to use your local pharmacy.

High Drug Costs

• If you spend a lot out-of-pocket on prescription drugs, some plans may offer additional coverage if you spend certain amounts per year. According to Medicare.gov, "Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage."