Prescription tiers are one way that insurance companies share costs with Medicare recipients. In general, insurers expect their members to pay less for drugs when they pay less and pay more when they pay more. Therefore, most Part D plans have a multitiered formulary where a beneficiary pays a lower price for generic drugs than brand name drugs and a lower price for those “preferred” brand name drugs where they negotiate a better price with the drug company than “non-preferred” brand drugs.

Insurance companies are able to restrict access to prescription drugs in certain medically acceptable ways in order to bring down the costs of providing expensive drugs. There are three primary tools that insurance companies use to manage costs: step therapy, prior authorization, and quantity limits (step therapy requires a patient to try one medication before moving on to the step therapy drug). Remember that although companies may impose these restrictions on drug access, they are overseen by Medicare and considered appropriate to help bring down medical costs for everyone.

Formularies were created to bring down the costs of medications, not to compromise peoples’ well-being. In most cases, there are many drugs that are equally effective in treating a particular ailment, just like there are many brands of cereal and TVs. The first thing to do if your drug is not on formulary is to ask your doctor if there is another drug that is on the formulary that will treat your condition. However, if there is not another appropriate drug, or that drug doesn’t work for you, your doctor has many options to pursue an exception with the company.