Save Money

Drug Formularies 101: The Lesser-Known Way to Save Money on Your Prescriptions

Facing high copays? Make this simple switch to get a better deal on your prescription.
Drug Formularies 101: The Lesser-Known Way to Save Money on Your Prescriptions

Photo credit: pogonici/Shutterstock.com

Beth Levine

By 

Beth Levine,   

May 12, 2020 • 4 min read

Share Blog on FacebookShare Blog on TwitterShare Blog on LinkedInShare Blog via Email

Have you ever gone to the pharmacy to pick up a new medication, only to find out that it’s not covered by your insurance? It’s a frustrating experience—especially when you get stuck with an unexpected out-of-pocket payment.

So why are some medications covered by insurance, and others aren’t? 

The answer has to do with a drug formulary, or the official list of generic and brand medications that your health plan has agreed to pay for. Getting to know your insurance formulary is important because it helps you understand which medications are available to you, how much they might cost, and whether there are any restrictions around them.

Here, we go over the ins and outs of drug formularies with Nicole T. Rochester, MD, founder and CEO of Your GPS Doc and author of Healthcare Navigation 101: A Guide for College-Bound Students (and Parents!).

Who decides what’s covered on a drug formulary?

Each insurance company has their own pharmacy and therapeutic committee who’s in charge of deciding which medications are included on a given formulary. Made up of pharmacists, physicians, and other specialists, these committees meet periodically to determine which medications will be covered, and how the insurer and the insured will split the costs. Decisions are often based on economics—so if a less expensive medication is proven to be as effective, the committee will usually choose to cover the less expensive option.

Action plan: Before you start taking a new medication, be sure to familiarize yourself with your insurance plan’s formulary because it’s a fluid process. A medication that’s covered one year, may be taken off in the next.

Are all formularies the same?

Formularies vary by insurance company, and by insurance plans within the insurance company. They can also vary state by state.

Action plan: If you’re taking a medication for a chronic illness, it’s best to review the formulary every year. You can find it on your insurance plan’s website—some companies even have apps you can download on your phone. If you can’t track it down online, call the customer service number on the back of your insurance card.

What are drug tiers?

For each formulary, drugs are divided into tiers to determine how much of the cost the insurance is going to absorb. Tier 1, usually for generic medications, is the least expensive. Tier 2 includes brand name drugs, and Tiers 3 and 4 are for the more expensive specialty drugs. The more expensive the drug, the more cost the insurance will pass onto the client.

Action plan: Check which tier your medications are on to see how much of the cost you’ll have to absorb. It’s possible that a drug that’s on Tier 3 for one plan, may be on a Tier 4 for another plan—so it’s a good idea to shop around.

What about restrictions like step therapy?

Every health plan is administered differently, so the rules for certain restrictions like step therapy, prior authorizations, and quantity limits will vary from plan to plan.

Action plan: Research medical restrictions before you choose your health plan (this information is typically on the company’s website). And if you’re taking an expensive specialty medication, it’s best to call. You don’t want to have to jump through hoops and red tape after the fact.

What should you do if your drug isn’t covered?

Ask your doctor or pharmacist if there’s a generic equivalent (and make sure to check for discounts with Blink Health). If there’s no alternative, most insurance companies have an appeals process that your doctor or pharmacist can help you with. You can also check with your pharmaceutical manufacturer, or seek out an assistance program through The Assistance Fund, the Patient Advocate Foundation, or the Patient Access Network (PAN) to see if you can get your medication for free or at reduced cost.

· · ·

This article is not medical advice. It is intended for general informational purposes and is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified healthcare provider with any questions you may have regarding a medical condition. If you think you may have a medical emergency, immediately call your physician or dial 911.

Blink Health is not insurance. The discount prescription drug provider is Blink Health Administration, LLC, 1407 Broadway, Suite 2100, New York, NY 10018, 1 (844) 265-6444, www.blinkhealth.com.

· · ·

Try the app now

FAQs • Contact Us
Our support team is available Monday through Friday 8AM - 10PM EST, and Saturday and Sunday 9AM - 7PM EST.

Blink Health will always honor the price reflected at the time you purchased your medication. Your final price is based on the medication you pick up at the pharmacy. If you pick up a different form, dosage, or quantity, you will be charged or credited the difference. Blink Health reserves the right to cancel a transaction and refund you if the underlying cost of the prescription drug changes significantly after you have purchased your medication. Blink Health reserves the right to change its prescription drug prices in real time based on supply and demand trends and other factors. Any savings claims made by Blink are based on U.S. retail prices without prescription drug coverage. *Retail Prices (Cash Prices) vary among pharmacies. The Retail Prices displayed are estimates based on multiple sources, including price lists, historical claims and data provided by pharmacies. Our Price Match Guarantee covers generic drugs. Additional conditions apply. For more details visit our Price Match page. †Delivery may be subject to delays. Free shipping is available for most orders through USPS first class shipping. If an order is placed, or if a delivery period falls, on a USPS holiday, the delivery time window will be extended by additional days, as applicable. No deliveries on Sunday or USPS holidays. Home delivery orders ship from a licensed, US based pharmacy after a valid prescription has been received. No home delivery orders will ship without a valid prescription written by a prescriber. Blink Health's pharmacy team will transfer prescriptions from other pharmacies or prescribers. Home delivery orders may be subject to delays if those pharmacies or prescribers do not immediately respond to requests to transfer prescriptions to Blink Health's pharmacy team. ‡Promotional offer excludes opioids, E.D. (i.e. sildenafil, tadalafil and generics Viagra and Cialis) and hair loss medications (i.e. finasteride, generic Propecia), and any orders that include online doctor visits for E.D., hair loss, birth control, cold sores, high cholesterol or acid reflux. Cannot be combined with other offers. Blink Health is not sponsored by or affiliated with any of the pharmacies identified. The pharmacy trademarks and logos above are the property of their respective owners. Blink Health is not offering advice, recommending or endorsing any specific prescription drug, pharmacy or other information. Please seek medical advice before starting, changing or terminating any medication or prescription.

Disclosures: Blink Health is NOT insurance or a Medicare prescription drug plan. Users are obligated to pay the price presented during the checkout process. Blink Health is available to users at participating pharmacies only. No enrollment or periodic fees apply. Our address is 1407 Broadway, Suite 2100, New York, NY 10018, 1 (844) 265 - 6444, www.blinkhealth.com.