Key takeaways:
A formulary is your health plan’s approved list of prescription medications. It includes brand-name and generic medications that meet the plan’s standards for safety, effectiveness, and cost.
Medications not included on this list are considered nonformulary. This usually means you’ll pay more out of pocket unless you qualify for an exception or meet requirements set by your plan.
Nonformulary medications are often excluded when lower-cost generics or safer, more effective alternatives are available. If your medication is not on your plan’s formulary, you could switch to a generic, request an exception, or use a GoodRx discount to lower your cost.
When a healthcare professional prescribes a medication, don’t assume that your insurance will help cover the cost. If your medication isn’t on your health plan’s formulary, you could face higher out-of-pocket costs or pay the full price.
It’s important to understand how formularies work and why certain medications may be excluded. This can help you avoid surprises at the pharmacy and take the steps to get the medication you need.
What is a formulary?
A formulary (sometimes called a drug formulary or prescription drug list) is your health plan’s approved list of prescription medications and related products, policies, and guidelines. It includes brand-name and generic medications. And it often groups them into tiers, or categories, that affect how much you’ll pay out of pocket. Lower tiers (Tier 1 generics) cost you less, while higher tiers (such as Tier 3 or 4 nonpreferred brand-name or specialty medications) mean higher copays or coinsurance.
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Your health plan will generally pay only for medications that appear on this list. If your medication is excluded, you may have to cover the full cost yourself. Another option is to ask for an exception. This is a formal request for your plan to cover a medication that’s not normally included.
Formularies are continually updated to make sure people have access to safe, effective, and affordable medications. This includes medication-use policies, helpful information about your prescriptions, and decision-support tools that guide safe and cost-effective prescribing.
Expert committees, such as a plan’s pharmacy and therapeutics (P&T) committee, regularly review clinical evidence, member needs, and negotiated pricing. This is how they decide which medications to include and how they are covered. Formularies may also require prior authorization, step therapy, or quantity limits to guide cost-effective use.
What does it mean if a medication is not in the formulary?
Even though there are countless prescription medications on the market, your health plan covers only the ones it selects for its formulary. Formularies are updated regularly (typically at least once per year). This means a medication that’s covered this year could be moved to a higher tier or dropped from coverage the next.
If your medication isn’t on the formulary, it’s considered nonformulary. But nonformulary doesn’t always mean you can’t get it. It usually means you’ll pay more out of pocket (sometimes the full cost) unless you qualify for an exception or meet extra requirements set by your plan. In many cases, you and your prescriber can still request coverage through a formulary exception or an appeal. This is common if you’ve tried other medications without success or had side effects.
Why do formularies exclude certain medications?
You may be wondering why your plan leaves certain medications off the formulary. The goal of a health plan when building a formulary is to balance safety, effectiveness, and cost. This means some medications don’t make the list right away. Here are some of the most common reasons:
A generic version of the medication is available. Health plans usually cover a lower-cost generic instead of the brand-name medication. For example, your plan might not include brand-name Lexapro, which is used to treat depression and anxiety, if generic escitalopram is available. Generics are considered just as safe and effective as their brand-name counterparts.
Other medications are preferred. If another option is thought to be safer, more effective, or better supported by research, your plan may exclude the less preferred medication. For instance, certain blood pressure medications may be dropped if another in the same class has better outcomes.
The medication is high cost. Brand-name or specialty medications with a high price tag may not be covered if lower-cost alternatives work just as well. For example, many plans prefer biosimilars instead of reference (brand-name biologics, like Humira (adalimumab).
The medication is newly approved. Health plans often wait before adding FDA-approved medications to their formularies. This allows time to review clinical data, update guidelines, and negotiate pricing with manufacturers.
The manufacturer did not agree to pricing. A medication may be excluded if the company that makes it doesn’t agree to discounts or rebates with the health plan. These negotiations can play a big role in whether a medication is listed as preferred or excluded.
There are safety concerns. A medication may be removed if the FDA issues new warnings about it, changes its labeling, or updates treatment guidelines to recommend other therapies.
The formulary is being updated. Formularies usually change at the start of each plan year, but adjustments can happen midyear as new generics launch, prices shift, or safety information becomes available.
Your insurance plan has a list of covered medications. Read how your plan’s medication formulary can affect what you pay at the pharmacy.
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Can you still get your prescriptions if they’re not on your formulary?
Yes. But it may take extra steps, and you’ll usually pay more. Here are some ways that you can still access a nonformulary medication:
Request a formulary exception. A healthcare professional can ask your insurance company to cover a nonformulary medication if it’s medically necessary. This often requires a letter from your prescriber explaining why other covered options don’t work.
File an appeal. If your exception request is denied, you may be able to file an internal appeal with more documentation or request an external review by a third party.
Look into transition fills. If you’re already taking a medication and switch insurance plans, some insurers will temporarily cover your medication while your exception request is being reviewed.
Use discounts. GoodRx offers discounts that can lower the cash price if insurance won’t cover your prescription. You can search your medication on GoodRx.com or in the GoodRx app, select the right dose and quantity, and then text, email, or print the coupon to show your pharmacist when you fill your prescription. You can also request a free physical card.
Check patient assistance programs. Some medication manufacturers and nonprofit organizations offer free or reduced-cost medications to eligible people.
Ask about alternatives. Sometimes switching to a generic, a preferred brand, or another medication in the same class can save you money and avoid the exception process.
How to request a formulary exception
A formulary exception is a formal request asking your insurance plan to cover a medication that’s not listed. A healthcare professional can request approval to cover the medication based on your medical needs, especially if alternative medications have failed or caused side effects.
Here are the steps you can take to request a formulary exception:
1. Contact your insurance carrier
Start by calling your insurer or logging into its website. You can request the formulary exception form and instructions for submission. In some cases, a healthcare professional can submit the request electronically. Ask your insurer if you need to take action or if your prescriber will handle the submission on your behalf. Also, request a timeline for when the insurance company will review the formulary exception.
2. Gather documentation
You’ll need a letter of medical necessity from a healthcare professional. They’ll need to explain why alternatives to this medication are not appropriate. The letter should include:
Your diagnosis and relevant medical history
Medications you’ve tried previously, and what happened. Explain side effects, allergic reactions, and effectiveness concerns. If a healthcare professional can document serious adverse reactions or failed outcomes with other medications, your request may have a better chance of approval.
A clear statement explaining why only this medication is appropriate for your treatment
3. Submit the request
A healthcare professional (or you, depending on your plan) will send:
The formulary exception form
The letter of medical necessity
Supporting medical documentation
It’s a good idea to ask your prescriber to confirm when it was submitted. You can also follow up with your insurer to make sure it was received.
4. Ask about transition fills
If you’ve recently switched insurance plans or were already taking the medication before coverage changed, ask your insurer about a transition fill.
5. Wait for a decision
Once your formulary exception has been submitted, your insurer will review the request. Standard requests are typically reviewed within 72 business hours. Expedited requests (marked urgent by your prescriber) may be reviewed within 24 hours. These are estimates; timelines vary by plan.
If your request is approved, you’ll receive instructions on how the medication will be covered and at what tier or cost. But if your request is denied, you can file an internal appeal with additional documentation. You can also request an external review by a third party if the internal appeal fails.
Can a healthcare professional access my formulary?
Yes, most prescribers should have access to your plan’s formulary. But they may not always check it before writing a prescription.
Some prescribers can look it up through their electronic health record (EHR) systems. This often allows them to see which medications are covered by your plan, which tier they fall under, and whether there are any restrictions, like prior authorization. But not all EHR systems are integrated with formularies. Others may need to call your insurance company or check your plan’s website manually.
Checking the formulary ahead of time can help avoid surprise denials and delays at the pharmacy. To make things easier, you can download a copy of your formulary from your insurer’s website or mobile app and bring it to your medical appointments.
What should I consider when choosing a health plan?
When shopping for a health plan, there’s a range of variables to consider. You may ask questions, like “Can I afford the monthly premium?” and “Can I continue to see my healthcare professional?”
You should also consider the medications you take. A formulary can help you with that. By reviewing different formularies, you can pick a health plan that covers your medications. You can also check which tier your medications are listed under and what your out-of-pocket costs might be. Remember, the same medication can be placed in different tiers depending on which plan and insurance company you choose.
The bottom line
If a healthcare professional prescribes a medication, it’s important to check your formulary to see if it’s covered. Health plans may leave medications off the list if a generic is available, if other alternatives are preferred, or if there are cost considerations. Even if your medication isn’t covered, you still have options. You can request a formulary exception, filing an appeal, or use discounts to help lower the cost.
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References
Ciccarello, C., et al. (2021). ASHP guidelines on the pharmacy and therapeutics committee and the formulary system. American Journal of Health-System Pharmacy.
HealthCare.gov. (n.d.). Formulary. Centers for Medicare & Medicaid Services.
Hydery, T., et al. (2024). A primer on formulary structures and strategies. Journal of Managed Care & Specialty Pharmacy.
United HealthCare. (n.d.). Prescription drug lists.
