A Complete Guide to Drug Formulary

Due to a lack of clarity, finding the right insurance coverage of a particular medicine can be a tedious task. To get detailed information regarding medication coverage, it is often advised to look into prescription drug coverage to save money and ensure better health. A drug formulary helps patients in selecting a tiered structure of low-cost medications that are available to them. 

Let’s discover how a drug formulary can help a patient in choosing the drugs that are covered within their insurance plan for a co-payment.

What is a Formulary?

A formulary, also referred to as a drug list, is defined as a list of prescription drugs that has been covered under a prescription drug plan or an insurance plan that offers prescription-based benefits. The list is periodically updated and approved by a particular health insurance company. It also provides regulatory updates to the user as well, which is an additional feature and advantage of a formulary.

A formulary often comprises both generic and name-brand prescriptions. It allows a patient to co-pay for the drugs that are covered by a particular insurance or health plan, instead of involving and paying for the full cost of the medicine. This list is one of the most basic lists when it comes to stating the names of medicines involved. 

What is a Formulary Drug?

A formulary drug is the list of approved drugs, prescriptions or medicines approved by an insurance company. It contains names of both generic and name-brand drugs. Often the list is approved by a particular health insurance policy, medical center or hospital. Drug formularies are developed on the basis of safety, efficiency and cost of the drugs approved for co-payments. 

Often a formulary drug contains detailed clinical information regarding particular drugs, such as dosage and side effects. Often a committee of medical experts evaluates the drugs for approval, along with considering the input of non-committee members. A drug formulary enables the health insurance providers as well as policymakers to engage in reducing and controlling the cost of drugs. The cost coverage for drugs varies from one another and may cover from a small percentage of the cost to a complete one. As a result, the formulary drugs are divided into tiers. 

Drugs that are often included within a formulary drug include antidepressants, antineoplastics, anticonvulsants, antipsychotics, immunosuppressants and antiretrovirals. Often for hospitals, it becomes impossible to keep all the drugs in store and readily available for the patients, so they only make a formulary drug based on available resources. However, in the case of an emergency or dire need, a hospital has to engage in accepting a non-formulary drug from a neighboring medical center, hospital or drug store.  

What is a Formulary Drug Tier?

A formulary drug is often divided into categories, commonly referred to as tiers, on the basis of their incurred cost, type or usage. Often a formulary drug comes with three, four or five tiers. As per the insurance or health plan, the drugs are categorized into a particular tier, each corresponds with a particular cost that must be paid to get access to it. The highest-tier drugs represent the higher costing medications and while the lowest-tier drugs represent lower costing medications.

Some factors that contribute to categorizing the formulary into tiers are as follows:

• Cost of the drug/prescription
• Comparative cost of the drug/prescription with the similar drugs/prescriptions
• Clinical efficacy of the drug/prescription
• Availability of the drug/prescription
• Delivery and storage cost of the drug/prescription
• Compliance of the drug/prescription with the standard of care 
• State laws and legal aspects affecting the approval of a certain drug/prescription

The formulary drug tiers enable a patient to choose the drugs based on their cost, efficacy and reliance for his/her own comfort. 

Let’s discover which tiers offer what advantages to a patient:

Tier 1

The drugs/prescriptions under tier 1 come with the lowest co-payment and are often generic brand-name in nature.

Tier 2

The drugs/prescriptions under tier 2 come with the medium co-payment ones and are often easy to afford.

Tier 3

The drugs/prescriptions under tier 1 come with the highest co-payment and often have generic versions available.

Tier 4

The drugs/prescriptions under the Tier 4 are often referred to as special ones because they are often used to treat serious diseases.

What Is a Non-formulary Drug?

Non-formulary drugs are those prescriptions that need to be accessed through higher-cost payment by a patient than its counterpart within the formulary list. A non-formulary drug often comes with no insurance coverage.

A medical committee may exempt certain drugs/prescriptions from the formulary list on the basis of the following reasons:

• Concerns about safety as well as the efficacy of the drug/prescription
• Availability of the drug/prescription over-the-counter
• Non-approval of the drug/prescription by the FDA
• Irrelevance of the drug/prescription
• Offers the same results as that of counterpart formulary drug/prescription

Common Challenges with Drug Formulary

A number of restrictions have been placed by legal, societal or state sections in finalizing the authorization of a particular drug. Often the hurdles are meant to make the process more transparent and accurate, limit the resale of drugs, improve the efficiency of the drugs, reduce the cost of drugs, discard off illegal usage of drugs as well as to promote the best clinical practices. However, still there are some loopholes that need to be covered within the drug formulary process. Some of the common challenges faced with drug formulary are stated below:

• Lack of public awareness regarding drug formularies
• Lack of will to learn about the suitable drug formulary
• Non-comprehension of placement of medications in the chosen formulary
• Lack of knowledge about coupons and assistance programs
• Non-enforcement of prescription coverage as an essential right
• Lack of information regarding drug formulary affecting laws
• Unwilling to share complaints in state and federal agencies
• Lack of awareness regarding placing an insurance appeal
• Lack of will to fight for consumer sensitive legislative laws

eNavvi – A Drug Formulary Database

eNavvi is a formulary that works to list what drugs or alternatives are covered by which insurance policy, in order to create drug price transparency and bring public awareness to the sensitive matter. We help the patients in selecting the drug that comes under the category of a certain formulary. To do so, we have developed an extensive database that allows the patients to check the drug against a certain formulary to plan their treatment accordingly. 

How to Use eNavvi?

eNavvi makes the process easier for the patients as well as medical experts to find out whether a drug or prescription has been covered by an insurance policy in a particular state or not. It enables them to see the latest information by displaying the last date on which the drug-related information was rehearsed and updated. 

To find information about a particular drug is co-payed by an insurance company within a particular state in eNavvi, one can follow these steps:

• Browse and open the eNavvi website.
• Select the formulary that has been targeted to co-pay the drug for.
• Enter the name of the drug that needs to be validated for insurance. To further help with this step, the user can choose the name of the drug from the most popular searches.
• The result, if matched, will give you a full-length description of the availability of the drug along with the following information:
  • Drug Name
  • Drug Tier
  • Drug Monthly Cost
  • Drug Additional Information
• Our database allows users to apply filters for finding more about a certain drug’s information, such as qualification and formulation. The search even shows results about similar other drugs and their corresponding detailed information to the user too, which helps them draw a useful comparison.

Thus, eNavvi will help you in professionally informing whether your patient’s medication is covered under the stipulated insurance plan or not. It helps in ensuring transparency in the matter, which benefits everyone. The main aim of such a formulary system is to advance the access of medical information, encouraging people to safely use medications, share information about effective medicines and provide knowledge about affordable drugs available in the market. This system can be effectively used by a healthcare institute to ensure a check and balance of the incoming medications as well.