Why isn't my prescription drug on my health insurance plan's drug formulary?

Written by Rebecca Farley | Reviewed by a licensed U.S. pharmacist | Posted November 09, 2019 | Updated September 09, 2020

Welcome to the weird, not-so-wonderful world of health insurance plans and prescription drug benefits (or lack thereof). Health insurance has a unique way of surprising you with what it cannot do. In certain cases, healthcare plans neglect one of the most important parts of a healthcare regimen: prescription medicine. Depending on your health plan, your prescription may not be covered by your “formulary,” which means your plan will not take on the cost of the drug prescribed to you by your primary provider.

What is a prescription drug formulary? How do PBMs get involved?

A drug formulary – also known as a “drug list” –  is a list of prescription drugs for which your insurance plan will help cover the cost. The premiums that you pay for your health insurance help finance your insurance company’s ability to help pay for your drugs and make them a lot of money in profits! For example, you might fill a prescription for a brand drug that costs $300 a month out-of-pocket for only a $50 co-payment. That means your insurer paid $250.

A drug formulary is created through a pharmacy and therapeutics (P&T) committee. P&Ts are comprised of expert panelists who are independent of the insurance company. The P&T panels often consist of pharmacists, nurses, doctors, and other clinicians.

Your formulary is probably published on your insurer’s website, but you may have to call them to get it. Some plans require that you contact your employer to obtain your formulary. Formularies can sometimes be difficult to track down, so just remember: You are not alone in having a hard time. It’s complicated!

For most pharmacy benefits plans, you’ll be responsible for some out-of-pocket costs in the form of “copayments,” a flat fee, or “coinsurance” (a percent of the drug’s cost).  Drugs are usually categorized by “tier.”

Tier one drugs are almost always generics and have the lowest co-payments, averaging $11, or co-insurance averaging 17%.

Tier two drugs are “preferred” brands, for which co-pays average $33, or co-insurance averages 25%.

Tier three drugs are “non-preferred,” for which co-pays average $59, or co-insurance averages 38%.

Tier four drugs are the most expensive brands, for which co-pays average $110, or co-insurance averages 28%.  This is all according to research performed by the Kaiser Family Health Foundation in 2017.

Formularies are managed by pharmacy benefit managers (PBM), third parties that negotiate drug discounts among pharmaceutical companies, health insurance companies, and pharmacies.  PBMs are the middlemen that help the insurer decide what drugs will be covered and what the cost of drugs will be for insurance customers. For example, CVS Caremark, one of the big five PBMs, has three formularies it can offer to companies looking to outsource prescription drug coverage.

The standard control formulary covers a broad range of drugs, with a focus on generic drugs.

The advanced control formulary covers some generics, with a focus on specialty and brand name drugs.

The value formulary includes specialty medications, with tier exceptions.

PBMs are under scrutiny, as their role in the industry is often unclear. In many cases, they are seen as another reason drug prices are so high. (PBMs are, of course, loath to take blame for soaring prices.) They negotiate with the drug retailers for lower prices, then accept rebates without passing those discounts on to the consumer. Drug companies and PBMs often point the finger at each other on why drug prices are so high.

Rebates, too, are seen as a villain in the prescription drug battle. In February 2019, the Trump administration proposed eliminating rebates paid to PBMs by drug makers. In July, the administration withdrew plans to eliminate these rebates. That’s too political for this post, but you can read this for more information.

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What if my drug is not on the formulary?

First of all, when you enroll in a health insurance plan, check that the prescription drug or drugs you need are on the formulary. Especially if you have a chronic condition that requires a prescription drug, you should prioritize finding a plan that covers that drug.

However, in certain cases, you may have changed plans and found yourself working with a new insurer who does not cover your prescribed drug. In this case, you can file for a formulary exception, so that you will still get coverage for it.

Filing an exception varies from plan to plan, but it will likely require you to have your doctor confirm with your insurer that you do need this medication. Your doctor will also be asked to prove that this medication – if it is a newer non-preferred medication or a brand name drug – is the only medication that can treat your condition.

If your drug is permitted as an exception, it will be covered according to the category identified by your plan.  For example, if it is a preferred drug, and your plan has a $25 co-payment for preferred drugs, then you should expect to pay $25.

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But what do I do if my drug isn’t covered?

You have a few options. You can look to patient assistance programs (PAP). These programs are often most helpful for exceedingly expensive, high-end specialty drugs. PharmacyChecker has a database of PAPs that may be able to assist your search.

The PharmacyChecker Discount Card can help find you lower prices but mostly with generics, which are often covered and lower-priced with insurance. In some instances, you’ll find that generic drug prices are even cheaper using the card without your insurance!

If you can’t afford your medicine at your local U.S. pharmacy, then you can find savings of up to 90% on many prescriptions at PharmacyChecker-accredited international online pharmacies. To do so, you can compare drug prices among accredited online pharmacies.

If you’re not able to afford the drug at all, then you can consult your provider to see if a less expensive generic or therapeutic alternative drug is available.

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Read more on PharmacyChecker.com

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Are drugs sold in Canada identical to those sold in the U.S.?

Do you have questions or concerns about filling prescriptions, whether locally or online? We’re here to help.

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