Drug Formulary

What do the different tiers mean?

Drugs on a formulary are typically grouped into tiers. The tier that your medication is in determines your portion of the drug cost. A typical drug benefit includes three or four tiers:

Tier 1 usually includes generic medications.

Tier 2 usually includes preferred brand-name medications.

Tier 3 usually includes non-preferred brand-name medications.

Tier 4 usually includes specialty and biosimilar medications (Three-tier programs do not have a unique tier for specialty medications)


A medication may be placed in tier 3 or 4 if it is new and not yet proven to be safe or effective, or there is a similar drug on a lower tier of the formulary that may provide you with the same benefit at a lower cost.

Note: If you have a federally qualified high-deductible health plan, you do not have a tiered drug benefit; your pharmacy and medical expenses are subject to your deductible and coinsurance. This section does not apply to you.