Formulary
and Explanation of Benefit Terms
Drug
Formulary and Tiered Co-payments
Your Rx drug
benefit includes a list of medications called a
formulary. A formulary is designed to provide you
with high-quality prescription drug therapy while reducing costs.
All medications have been reviewed by a Pharmacy and
Therapeutics Committee based on safety, efficacy,
uniqueness and cost. Coverage of any product is subject
to your plan’s benefit design. If your plan has a
three-tiered
formulary benefit design, it has been constructed to assist and
encourage you and your physician in selecting the most
cost-effective therapeutic options.
In
general, a 3-tier benefit is designed as follows:
Tier 1: Generic Drugs - Generic
drugs cost considerably less than their branded
drugs. All are approved by the FDA as being equivalent
in potency and purity to brand name counterparts. Your
co-payment will usually be considerably less. Further,
your health plan pays less for generic drugs.
Tier 2: Formulary Brand Name Drugs -
These are
preferred drugs selected by the Pharmacy and
Therapeutics committee for your plan.
Tier 3: Non-Formulary Brand Name Drugs -
These drugs
are available, but at the highest co-payment. More
cost-effective drugs usually exist in Tier 1 or Tier 2
for the same disease or condition.