Drug Formulary

What Does Drug Formulary Mean?

A drug formulary is a list of medications approved by a health insurance provider, organized into categories based on cost.

Insuranceopedia Explains Drug Formulary

Medical experts, including licensed physicians, create and regularly update the drug formulary based on factors such as cost, safety, and effectiveness. The formulary is often revised to include new information about the listed medications. If a policyholder buys a drug not included in the formulary (a non-formulary drug), they typically pay more than they would for a formulary alternative.

This list is usually included in the certificate of insurance for a health policy. The drugs are categorized into two tiers: the first tier includes generic drugs, while the second tier comprises name-brand medications.