What Does Drug Formulary Mean?
A drug formulary is a list of drugs approved by a health insurance provider, categorized by cost.
Insuranceopedia Explains Drug Formulary
Medical experts, such as licensed physicians, craft and update the list based on the drugs’ cost, safety, and effectiveness. They are often updated to reflect new information about the drugs listed in them. If a policyholder purchases a drug that is not listed (and is, thereby, non-formulary), they will pay more for the drug than they would by purchasing an alternative from the formulary.
This list is usually found in the certificate of insurance of a health policy. The drugs it lists are divided into two tiers. The first tier contains generic drugs, while the second lists name-brand ones.