How Do You Use an Insurance Company's Drug Formulary?


Quick Answer

To effectively use your insurance company's drug formulary, study the drug classes, and learn how tier-pricing works, according to About.com. Review the drugs you take, find the position of each in your insurance company's formulary, and be proactive in discussing the formulary with your doctor to find medications that cost the least. The four tiers in the formulary typically distinguish between generic drugs, brand name drugs and specialty drugs.

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Full Answer

Note that the least expensive drugs in the lower tiers cost consumers less, says About.com. Tier I drugs typically cost the insured about $10 to $20. Some OTC medications that used to require prescriptions might show up in a formulary, so compare what you usually buy with your payer's formulary.

Look at Tier II on your insurance company's formulary, as this is where insurers usually provide their lists of preferred brands, according to About.com. Tier II drugs usually cost the insured about $15 to $50. If it is necessary that you take a specific brand, check to see if it is on the preferred list. Tier III drugs typically cost the insured between $25 to $75. Drugs in Tier III are all considered nonpreferred.

The most expensive level is Tier IV, which contains specialty drugs. Instead of setting a specific co-pay, most payers assign a percentage, such as 60 percent. Learning how the tiers on your formulary function empowers you to be informed and proactive regarding your medical care.

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