Medicare Part D plans have different cost-sharing tiers for drugs. While different plans have different drug tiers, they all go from lowest to highest cost with Tier 1 covering generics at the lowest copayment.[1][2]

The most common structure to find for Formulary drug tiers looks something like this:

  • Tier 1: Preferred Generic. Lowest copayment.
  • Tier 2: Non-preferred Generic. Low copayment.
  • Tier 3: Preferred brand-name. Medium copayment.
  • Tier 4: Non-preferred brand-name. High copayment.
  • Tier 5 (Speciality Tier): Unique and very expensive high-cost prescription drugs. Highest copayment.

With that said, since different plans can use different structures, let’s look at a few other examples.

Here is an example of what a 4 Tier structure looks like:

  • Tier 1: Most generic prescription drugs. Lowest copayment.
  • Tier 2: Preferred, brand-name prescription drugs. Medium copayment.
  • Tier 3: Non-preferred, brand-name prescription drugs. High copayment.
  • Tier 4 (Specialty Tier): Very high-cost prescription drugs. Highest copayment.

Here is an example of what a 5 Tier structure looks like:

  • Tier 1: Preferred, common low-cost generic prescription drugs. Lowest copayment.
  • Tier 2: Non-preferred, most generic prescription drugs. Low copayment.
  • Tier 3: Preferred, brand-name prescription drugs, and some higher costing generics. Medium copayment.
  • Tier 4: Non-preferred, brand-name prescription drugs, and some non-preferred higher costing generics. High copayment.
  • Tier 5 (Speciality Tier): Unique and very expensive high-cost prescription drugs. Highest copayment.
Citations

  1. What Medicare Part D drug plans cover. Medicare.Gov.
  2. How are Drug Tiers defined on a Medicare Part D plan’s formulary? Q1Medicare.com.