I keep hearing the terms formulary and preferred drug list. What do they mean and should I be worried if my current insurance plan has one? What about my friends that have Medicaid?
A formulary is a list of prescriptions drugs that are covered by a particular health plan[i]. A formulary can divide drugs into sections, or “tiers,” and assign different costs to those tiers. For example, a plan may have 5 tiers of covered drugs. Drugs on the lowest tier, “Tier 1,” are usually low-cost generic drugs and plans often charge a small, flat rate. The price plans charge for drugs on their formularies usually increases with each formulary tiers, Tier 2 drugs cost more than Tier 1 and Tier 3 cost more than Tier 2. Many plans also have “specialty tiers,” where they place the highest cost drugs.
A preferred drug list (sometimes referred to as PDL) is a published list of drugs that that usually is divided into two categories, “preferred” and “non-preferred.” Preferred drugs usually are covered without the need to receive authorization from the insurance company, while non-preferred drugs can be accessed if you and/or your doctor seek prior approval, or “prior authorization[ii].”
The two terms are often interchangeable, however, private health plans normally use the term formulary, while preferred drug list more often is associated with Medicaid coverage. Up until recently, most products used to treat bleeding disorders were not on formularies or preferred drug lists, however a few states and private plans have started to manage access to bleeding disorders products in this way.
If you have private insurance, call your plan and find out if they have, or intent to use, a formulary for bleeding disorder products. If yes, find out (1) if the product you use is covered and (2) if so, at what price. If you find out that your product is NOT covered, or covered at a price that would cause you financial hardship, you can try to work with your plan to get an exception or, if all else fails, file a formal appeal. For more information on how to file an appeal, visit HFA’s website. Most recently, United Health Care (United) chose to place hemophilia products on a formulary. If you have United insurance, and need to file an appeal with United, click here for instructions.
For those on Medicaid, some states have started to implement preferred drug lists. Depending on the state you live in, access to drugs on the preferred list should be easily accessible; however, patients wanting to use products on the non-preferred list may need to seek prior approval or authorization, get a note from their doctor that outlines the clinical necessity of using the non-preferred product, or perform certain testing. Consult with your doctor about how to access drugs on the non-preferred list in your state.
If you find that you cannot get access to a clotting factor product that you need because it is non-preferred, or if your health plan changes its PDL in the middle of the plan year, cutting off your access to your medication, please let us at HFA know by completing Project CALLS! Together, we can build a case for change.
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HFA frequently receives questions from the bleeding disorders community related to advocacy issues. The questions often impact the entire community. In an effort to reach the largest audience possible with our responses to these widely applicable questions, HFA developed “Dear Addy.” Questions submitted to this column are edited in order to protect privacy and should be considered educational only, not individual guidance.
[i] Margaret Rouse, formulary: definitions Search Health IT (2012), http://searchhealthit.techtarget.com/definition/formulary (last visited Nov 13, 2016).
[ii] Pharmaceutical Preferred Drug Lists (PDLs) – State Medicaid and Beyond, Columbia Law School (2007), web.law.columbia.edu/sites/default/files/…/pharmaceutical_preferred_drug_lists.doc (last visited Nov 13, 2016).