What Is a Formulary Brand?

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.