Drug Tiers

Prescription drugs are grouped into categories called tiers. The tier assigned to a medication helps determine how much you pay for that drug.

In general, lower-tier medications have lower out-of-pocket costs, while higher-tier medications may have higher cost-sharing.

The number of tiers and the cost-sharing associated with each tier vary by plan.

Tier 1 – Generic Drugs

Generic drugs are typically placed in the lowest-cost tier.

Generic medications contain the same active ingredients as their brand-name equivalents and are approved by the FDA as safe and effective.

Preferred Brand Drugs

Preferred brand drugs are covered brand-name medications that generally have lower cost-sharing than other brand-name drugs.

Non-Preferred Brand Drugs

Non-preferred brand drugs are covered medications that may have higher copays or coinsurance than preferred alternatives.

Specialty Drugs

Specialty drugs are high-cost medications used to treat complex or chronic conditions. These medications may have higher cost-sharing requirements and additional coverage rules.

Why Drug Tiers Matter

The tier assigned to your medication can affect:

• Your copay or coinsurance
• Whether prior authorization is required
• Whether step therapy applies
• Your overall out-of-pocket costs

Looking Up a Drug Tier

You can use your plan’s formulary or drug search tool to see:

• Whether a drug is covered
• Which tier it belongs to
• Any coverage rules that apply

Need Help With Coverage Rules?

Some medications may require prior authorization, step therapy, or quantity limits before they can be covered.

Related Resources

Key Terms →

Coinsurance →