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Drug Tiers: How drugs are organized on the 2015 Medicare Part D plan formularies


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Drug Tiers: How drugs are organized on the 2015 Medicare Part D plan formularies
Published on 2015-02-03 14:36:49
Category: Annual Medicare Plan Changes


Medicare prescription drug plans organize covered medications into different logical categories or tiers -- each with a different co-payment or cost-sharing amount (for instance, you may have a $5 co-pay for generic drugs, a $30 co-pay for your brand name drugs, and 33% co-insurance for your Tier 5 specialty drugs).

However, as you start comparing different Medicare Part D plans, you may find that there are no standardized drug tier definitions.

For the majority of Medicare Part D prescription drug plans -- 89% of PDP (up from 76% in 2014) and 71% of MAPD plans (up from 68% in 2014), the formulary drug tier definitions are as follows:

Tier 1: Preferred Generic
Tier 2: Non-Preferred Generic
Tier 3: Preferred Brand
Tier 4: Non-Preferred Brand
Tier 5: Specialty Tier

How different drugs are organized into the formulary drug tiers generally depends on the Medicare Part D plan (or the plan's Pharmaceutical Benefit Manager) and how many tiers are on the plan’s formulary.

  • Tier 1 is generally the least expensive tier and contains generics or preferred generics.
  • 90% of stand-alone prescription drug plans use Tier 2 for Non-Preferred Generic Drugs, with 10% have Tier 2 covering Preferred Brand Drugs.
  • 90% of the plans use Tier 3 for Preferred Brand Drugs and 10% use Tier 3 for Non-Preferred Brand Drugs.
  • 90% of plan use Tier 4 for Non-Preferred Brand Drugs and 10% use Tier 4 for Specialty Tier Drugs.
  • Tier 5 is used for Specialty Tier Drugs 89% of the time when a plan has 5 or more drug tiers on their formulary.
The charts below show the number of tiers on formularies and the tier definitions for each tier followed by the number of Medicare Part D plans using this combination of tiers and definitions.  There are two (2) charts, the first is for Stand-alone Medicare Prescription Drug plans (PDPs) and the second chart is for Medicare Advantage plans with prescription drug coverage (MAPDs)

Please Note:  Some plans simply call their "tiers" by their not-very-helpful "tier numbers," so it is difficult to determine which types of drugs on each tier.  Also, many plans loosely adhear to the tier definition.  You can find some generic drugs on a brand-name drug tier, especially if the generic drug is a newly released brand-name drug equivalent:

2015 Stand-alone Medicare Prescription Drug Plans
Nbr of Tiers Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Nbr of Plans
4 Generic Preferred Brand Non-Preferred Brand
Specialty Tier     68
4 Preferred Generic Non-Preferred Generic Preferred Brand Specialty Tier
    1
4 Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier     36
5
Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier    904
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Injectable Drugs Specialty Tier 2
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Select Diabetic Drugs 2


If you are looking to see how a specific Medicare Part D plan (PDP) or Medicare Advantage plan (MA) defines their drug tiers, you can use our 2015 PDP-Finder or 2015 MA-Finder for tier definitions and cost-sharing.  Also, keep in mind that cost-sharing for the same tier can be different at preferred network pharmacies as compared to non-preferred network pharmacies.

2015 Medicare Advantage Plans with Prescription Drug Coverage
Nbr of Tiers Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Nbr of Plans
2 Generic Brand         3
3 Generic Brand Specialty Tier       3
3 Preferred Generic Preferred Brand Non-Preferred Brand       3
3 Generic Drugs Brand Drugs Non-Medicare OTC Drugs       2
3 Generic Drugs
BrandDrugs Non-Medicare Rx/OTC Drugs       18
3 Preferred Generic Preferred Brand Specialty Tier       7
4 Generic Preferred Brand Non-Preferred Brand Injectable Drugs     7
4 Generic Preferred Brand Non-Preferred Brand Specialty Tier     70
4 Generic Drugs Brand Drugs Non-Medicare Rx Drugs Non-Medicare OTC Drugs     10
4 Generic Drugs Preferred Brand Drugs Non-Preferred Brand Drugs Non-Medicare Rx/OTC Drugs     1
4 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand     31
4 Preferred Generic Non-Preferred Generic Preferred Brand Specialty Tier     14
4 Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier     53
5 Generic Preferred Brand Non-Preferred Brand Specialty Tier Select Care Drugs   12
5 Preferred Generic Non-Preferred Generic Preferred Brand Injectable Drugs Specialty Tier   2
5 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier   1478
5 Preferred Generic Non-Preferred Generic Preferred Brand Specialty Tier Select Care Drugs   1
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Injectable Drugs Specialty Tier
23
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Injectable Drugs 7
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Select Care Drugs 242
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Select Diabetic Drugs 23
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Supplemental Brand and Generic Drugs 4
6 Preferred Generic Non-Preferred Generic Preferred Brand Non-Preferred Brand Specialty Tier Vaccines 68

 
If you are looking to see how a specific Medicare Part D plan (PDP) or Medicare Advantage plan (MA) defines their drug tiers, you can use our 2015 PDP-Finder or 2015 MA-Finder for tier definitions and cost-sharing.  Also, keep in mind that cost-sharing for the same tier can be different at preferred network pharmacies as compared to non-preferred network pharmacies.



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