Hi, you may be wondering, what is a medication tiers? Medication tiers are a system used by pharmacies and insurance companies to categorize prescription drugs based on their cost and clinical effectiveness. Medication tiers are typically used in along with a pharmacy benefit manager (PBM) when manage prescription drug costs for insurance plans.

Medication tiers are usually divided into four or five categories and each category representing a different level of cost and clinical effectiveness. The lowest tier typically consists of generic drugs that are the more affordable and have the same active ingredients as their brand-name counterparts. The next tier usually is preferred brand-name drugs that are brand-name drugs deemed both clinically effective and cost-effective by the PBM. The third tier usually has non-preferred brand-name drugs that are brand-name drugs and not deemed as clinically effective or cost-effective as the drugs in the first two tiers. The fourth tier usually has specialty drugs that are high-cost, complex drugs and are used to treat rare or chronic conditions.

People with insurance plans who use medication tiers usually pay a lower copayment for lower tiers drugs and a higher copayment for higher tiers drugs. The copayment for a drug in a particular tier depends on each insurance plan and may vary based on factors like a person's location and the specific drug. Medication tiers are a way for pharmacies and insurance companies to manage prescription drug costs and promote the use of lower-cost, clinically effective drugs. But, they can cause challenges for people who need higher tier drugs and they may have to pay higher copayments for these drugs.

So, medication tiers are a system used by pharmacies and insurance companies to categorize prescription drugs based on cost and clinical effectiveness. Medication tiers are usually divided into four or five categories, with the lowest tier consisting of generic drugs and the highest tier consisting of specialty drugs. Individuals with insurance plans that use medication tiers typically pay a lower copayment for drugs in the lower tiers. And, a higher copayment for higher tier drugs. Medication tiers are a way to manage prescription drug costs. However, medication tiers create challenges for people who require higher tier drugs.