Most formularies currently in the marketplace are variations on this theme. The plan sponsor is then incentivized to promote the use of the products that offer the highest rebate. Some of the earliest types of managed pharmacy formularies feature relatively simple models where pharmaceutical manufacturers negotiate the position of their drugs on the formulary by offering rebates to plan sponsors. Rebates-based models influence a drug’s position on the formulary. However, they also have the lowest rebates and highest costs to the payer.Ģ. These formularies are more prescriber and member friendly as they allow for the greatest freedom of choice in therapy. Open formularies provide coverage for all prescription medications, with some potential exceptions for over-the-counter and cosmetic medications. Whether drug list decisions are focused on maximizing rebates, finding the lowest net cost, or member outcomes, the key is to find the right fit aligned with each client’s goals.ġ. There are several models for building a pharmacy formulary. What are the different types of formularies? In the second part of our formulary series, we’ll share the different types of formularies, how utilization management factors into formulary success, and tips for helping your client build the best formulary for their plan. Since copayment is linked to the formulary tier of a product, a plan sponsor can select formularies tiers and adjust the copayments to balance member satisfaction with cost savings. Utilization management tools, such as prior authorization, step therapy rules, and quantity limits, ensure members have access to the right medications at the best prices. An effective formulary meets the goals and needs of members and employers - who are paying the bulk of the pharmacy costs. As a benefit advisor, knowing the types of formularies and where they best fit will help you get the best clinical and economic outcomes for plan sponsors and members.Īs we shared in part 1, a formulary is a list of preferred drugs designed to influence which drug products get prescribed and used by members – ideally, those that are the safest, medically appropriate, and most cost-effective. How utilization management complements a well-selected formularyįormulary selection is an essential building block for self-funded employer clients creating a prescription drug program.The differences between formulary types.There are specific rules for filling prescriptions for certain types of drugs. Is prescribed for an amount more than the normal limitĬheck the TRICARE Formulary to see if you need pre-authorization.Is a brand-name prescription drug with a generic substitute.Is specified by the DoD Pharmacy & Therapeutics Committee.Pre-authorization RequirementsĬertain prescriptions require a pre-authorization. You may need pre-authorization for your prescription if it: They depend on the medical effectiveness and cost effectiveness of a drug compared to other similar drugs. These categories follow industry standards. Prescription drugs fall into four categories: Your costs will vary depending on your drug category. We review and update the TRICARE Formulary each quarter. After each review, some drugs may move from one category to another. You’ll get a letter from Express Scripts if you have a prescription for a formulary drug that’s changing to a non-formulary drug. Prescription drugs may be covered under the pharmacy benefit or the medical benefit. The TRICARE Formulary is a list of generic and brand-name prescription drugs that we cover. TRICARE covers most prescription drugs approved by the Food and Drug Administration (FDA). If you use the US Family Health Plan, you have a separate pharmacy coverage. TRICARE provides prescription drug coverage with most TRICARE health plans.
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