Pharmacy tier pricing

Pharmacy tier pricing is the way prescription medications are categorized, which can help you identify the lowest cost medication that is sufficient for your treatment. Tiers are based on usage, cost, and clinical effectiveness. Medications in Tier 1 have the lowest co-pay or co-insurance, and medication in Tiers 3, 4, or 5 have the highest.

Tiers can vary by plan, but below is an example of a typical four-tier formulary.

Tier

Medication Type

Tier 1

Generic - Generic drugs.  Learn more about generic drugs from the FDA.

Tier 2

Prefered brand - Brand-name drugs preferred because of their safety, efficacy, and cost, often with no generic equivalent

Tier 3

Non-preferred brand - Brand-name drugs that have a lower-cost alternative in Tiers 1 or 2, or have no alternative but a higher cost or

Tier 4

Specialty - Medications used to treat complex conditions, or require specialized dosing or administration, or are prescribed by a specialist.  Can also include new medications that haven’t yet been proven to be safe or effective.

 

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