Formulary, Non-Formulary, Generic, Brand Name it’s all so confusing. What do these terms mean?

These are all commonly used terms when it comes to prescription drug benefits.  In the health care industry today, health plans have lists of prescription drugs that they call their formulary; drugs not listed are considered to be non-formulary drugs.  Prescription drugs listed under a plan’s formulary will have lower copays, where non-formulary drugs may not be covered or have higher copays and coinsurance. In some plans the non-formulary drug costs don’t go towards deductibles and out-of-pocket maximums.

Under plan formularies there are different tiers of drugs. You may find both generic and brand name drugs listed as both formulary and non-formulary. Generics are just as their name indicates a generic form of a drug. Generic drugs have lower copays and are cheaper than their brand name counterpart. Brand name drugs have higher co-pays, and health plans tend to keep costs down by encouraging individuals to use generic drugs.  Generics are not available for all brand name drugs. Pharmaceutical companies hold 20 year patents on the drugs they invent, once this time has elapsed a generic version can be made available.

Most carriers provide a copy of their formulary (drug list) on their website; you may also contact your carrier to find out if a particular drug is covered under your plan’s formulary.  Some carriers have more than one formulary; different formularies for different plans.

Finding out if a drug is covered under a plan’s formulary and if it’s generic or brand name is particularly important for most people when shopping for new insurance during open enrollment.  As your agent we can help you find your plan’s formulary online or help in getting a copy mailed to you.