Formulary versus Non-Formulary Prescription Drugs – What is the Difference?
There always comes a point where, while looking down your health insurance policies summary of benefits (normally HMOs), you come to a point where you meet the prescription section. More often than not, you will find the words “formulary, and non-formulary”, and usually “generic, and brand” along with those. Generic drugs and brand name drugs are normally understood by the general public, and specially in this post, I will be going over the difference between the two definitions that are not as clear, formulary versus non-formulary.
What is a Formulary Drug or Prescription?
A formulary prescription is a prescription list that the insurance carriers’ believe to be well suited to be used medically by a majority portion of members; formulary drugs are drugs the insurance carrier trusts to help their members (the insured) rise back to health after administering. These formulary drug lists have prescriptions that have been tested and researched to be safe and effective, as well as less costly to both the insurance carrier and the member. The insurance companies see formulary drug lists as ways to: increase safety and effectiveness (although, it can be debatable if their formularies have the best prescriptions out there, it just depends on the specific case and insurance carrier) while also keeping costs down for both parties. Both brand name drugs and generic drugs can be found on formularies, however, generic drugs are almost always less costly and essentially chemically equivalent to brand name drugs.
How exactly do these Drugs cost Insurance Carriers less while also being Effective?
The best example for this would be purchasing products in bulk. If the insurance carrier has tested the drug to make sure it is effective and safe, they purchase a large amount of the drug and put it into their formularies (this may not be the only case, it just depends on the insurance carrier). Also, if there is only one thing to choose from, it keeps administration costs down as well. Think of, one-size-fits-all (in a positive way).
Worried that your Formularies are getting out of date?
You can stop your worrying; formulary drug lists get updated when there are new studies done, new drugs being introduced, and new research changing what is considered “effective”. That being said, you shouldn’t find a drug on your formulary from the dark ages (don’t quote me on that; I don’t currently run any Insurance Company and I haven’t looked through every single prescription. It is just a normality to update the formularies!)
What are non-formularies?
I am sure you have guessed it by now, but if you haven’t, non-formulary prescriptions aren’t on the insurance policies list of preferred drugs. Knowing that, non-formularies are more costly.
When should I buy non-formularies?
This is a question you should talk to your doctor about, because it really just depends on the specific drug and the purpose for taking it.
In Summary – Formulary versus Non-Formulary
Formularies are lists that have the insurance carriers preferred drugs. You can normally find both generic and brand name drugs in the formularies. Formulary prescription drugs are chosen for their cost, effectiveness, and their safety. Non-formulary drugs will cost the member more money than formularies.
I hope this has helped you find the answer you needed; have a great day!
Want more answers for your health insurance questions? Call Brett at (714) 377-0600
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