Understanding drug formularies

Pills Out Of Bottle

Once your health plan starts, you may wonder how to get the most out of your prescription drug benefits. A formulary is an important tool that tells you which drugs are covered and whether there are any special coverage rules.

Formularies are reviewed and updated each year to help ensure your safety and to provide cost-effective choices. To view your health plan’s formulary, refer to your insurance company’s website or contact them directly. If you have a Humana plan, you can find your Humana Drug List here:

How drug pricing works in formularies

Formularies are often broken down into levels called tiers. The tier a drug is in tells you how much it will cost. If you look at your Summary of Benefits and Coverage, you’ll see the copay or coinsurance amount for each tier under your health plan.

Generally, the higher the tier, the higher the cost of the drug. For example, a 3-tier formulary will have the lowest-cost drugs in Tier 1, higher-cost drugs in Tier 2 and the highest-cost drugs in Tier 3.

Tiers may include certain terms that impact the cost of a drug:

  • Brand-name drugs are drugs marketed under a specific name, and usually cost more.
  • A generic drug is an equivalent of a brand-name drug that is just as safe, strong and effective as the brand-name version—but is often up to 80%–85% cheaper.¹
  • A preferred drug is a drug your health plan prefers you take to ensure you get the most effective medicine at the lowest cost possible.

Here’s how these terms could be used in a 5-tier formulary:

  • Tier 1 – Preferred generic drugs (lowest copay)
  • Tier 2 – Generic drugs (higher copay than Tier 1)
  • Tier 3 – Preferred brand-name drugs (higher copay than Tier 2)
  • Tier 4 – Nonpreferred drugs (higher copay than Tier 3)
  • Tier 5 – Drugs for specialty, rare or chronic conditions (highest copay)

Prior authorization, step therapy and other coverage rules

Formularies also tell you whether a drug requires prior authorization. This means your prescriber needs to get approval from your insurance company before the drug is covered. The purpose of prior authorization is to ensure the drug is used correctly and only when medically necessary.

You may need prior authorization if a drug you’re prescribed:

  • Has a lower-cost generic or alternative option available
  • Has a quantity limit that your prescriber wants to exceed
  • Is dangerous to combine with another drug you’re taking
  • May have serious side effects or requires special monitoring
  • Is a controlled substance and is more likely to be abused or misused

Sometimes your health plan may require that you try a cheaper option for a drug before you can “move up a step” to the more expensive option. If the cheaper option doesn’t work for you, your plan can cover the more expensive version. This is called step therapy or step edits.

If you have a Humana plan, you can see which drugs require prior authorization by searching Humana’s Medicare Drug List or Employer Drug List.

Note: to avoid delays or paying higher costs out of pocket, you’ll need to obtain prior authorization before filling a prescription. CenterWell Pharmacy® can take care of this for you. If we receive a prescription for a drug that requires prior authorization, we reach out to your prescriber before we fill your prescription. If needed, you can also request prior authorization yourself.

What to do if your drug isn’t covered

If a drug you need isn’t covered on your health plan’s formulary, you can start by asking your prescriber if there’s another drug you can try that is covered by your plan. If there isn’t, or if your prescriber thinks it’s necessary to request an exception for your drug, have your prescriber contact your insurance company.

If you have a Humana plan, your prescriber can call the Humana Clinical Pharmacy Review at 800-555-2546, Monday – Friday, 8 a.m. – 8 p.m., Eastern time.

If you choose to pay for a drug out of pocket, there are still ways to save.

Changes to Humana’s drug formulary

Humana’s Medicare formulary updates each year. As part of the Inflation Reduction Act, covered Part D vaccines now have a $0 copay* and covered insulins will be no more than $35 for every 30-day supply. If you have a Humana Medicare plan, check out all the prescription drug coverage updates for 2023.

How CenterWell Pharmacy makes it easy to get your prescriptions

CenterWell Pharmacy is here to help you get the most out of your prescription drug coverage. When a drug:

  • Requires prior authorization, we reach out to your prescriber before we fill the prescription
  • Is a brand-name prescription, we’ll check for generics to help you save, unless your prescriber declines
  • Isn’t covered by your health plan, we can work with your prescriber to find alternatives
  • Is eligible for a 90- or 100-day supply, we may offer savings over a 30- or 60-day supply

We also double-check every order for accuracy and any potential drug interactions to help keep you safe. Plus, our convenient mail-order service comes with easy order tracking.

If you’re ready to get started, transfer or start a new prescription today.

Once your prescriber approves your prescription, we’ll mail your medicine safely and securely to your door in 7–10 days.

If you need help or have questions, please don’t hesitate to contact us.


  1. “Generic Drugs: Questions and Answers,” U.S. Food and Drug Administration, last accessed December 15, 2022, https://www.fda.gov/drugs/frequently-asked-questions-popular-topics/generic-drugs-questions-answers.


This material is provided for informational use only and should not be construed as medical advice or used in place of consulting a licensed medical professional. If you are in a life-threatening or emergency situation, please dial 9-1-1 and seek medical attention immediately.

Links to various other websites from this site are provided for your convenience only and do not constitute or imply endorsement by CenterWell Pharmacy or its subsidiaries of these sites, any products, views, or services described on these sites, or of any other material contained therein. CenterWell Pharmacy disclaims responsibility for their content and accuracy.

*Applies to Humana covered Part D vaccines listed on the Advisory Committee on Immunization Practices (ACIP) list. Restrictions based on age and vaccine availability may apply. For more information regarding the Centers for Disease Control and Prevention’s ACIP vaccine recommendations, please go to www.cdc.gov/vaccines/hcp/acip-recs/vacc-specific/index.html.

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