Tuesday, December 16, 2014

What is a FORMULARY?

In the United States, a formulary is the list of medications available to someone enrolled in a specific drug insurance program.

Usually a "tiered" system is in place as an incentive for patients to select lower-cost medications. Under a three tier system (the most common), first tier has the least expensive generic drugs and the lowest co-pay. As the medication cost increases, it is listed in a higher tier and thus has a higher co-pay. Usually the third tier has most brand-name medications and the highest co-pay.

The formularies are in place to help insurance manage drug costs imposed on the insurance policy. If the drug is not on the formulary, it usually requires a "prior authorization" -- meaning the insurance company wants to talk to the prescriber to see if there is a lower-cost alternative for the patient. Formularies vary from plan to plan and insurance to insurance. Co-pays vary as well.

Your pharmacy has no control over your insurance, your formulary, or your co-pay. As a courtesy we bill the insurance electronically in your behalf. Within seconds we receive information on if your claim was paid and the amount of your co-pay. Sometimes we get a reject saying "prior authorization" required or the medication your insurance will pay for.

You can always find out if a medication is on your formulary by calling your drug insurance company or looking on their website. Your pharmacist has no way of knowing what is on your formulary without a valid prescription to adjudicate.


Anonymous said...

Prescription medication costs are just weird. I pay $10.00/ month for my thyroid medication but when I was prescribed percocet after surgery it cost only $1.77 for 20 pills. Meanwhile, my father had cancer and one of his medications...a single dose, cost $500.00.

Mrs_R said...

Didn't know the best way to share this huffpost piece with you, but it made me think of all the customer service stories you've posted.

Alfredo said...

Those formularies help the payer and PBM reduce costs but do they really help patients?