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Pharmacy Benefits

Understanding prescription drug costs

Understanding prescription drug costs

Understanding prescription drug types and tiers can be challenging. We can help you better understand prescription medications and their costs.

Prescription drug types

Most Blue Cross and Blue Shield of North Carolina (Blue Cross NC) members have a drug plan that covers prescriptions from the pharmacy. If you're taking medications or will be soon, it's important to understand how drug costs work and where you might save money. 

Prescription drug costs vary according to factors such as the drug type, the tier or drug cost level, and the formulary or the listed of covered drugs. There are three different drug categories: brand-name, generic, and specialty.

Generic

Generic drugs have the same active ingredients as brand-name drugs and have received FDA approval. They can have a different shape, size, and color than the brand name drug, but they are just as safe and effective. Generics also tend to cost less than brand-name drugs.

Brand-name

Brand-name drugs are the original version of a medication made by the manufacturer. For example, Tylenol® is the brand-name for acetaminophen. Brand-name drugs tend to be more expensive than their generic alternatives. Brand-name drugs may not be fully covered by insurance if there is a generic version available.

Specialty

Specialty drugs treat complex, rare, or chronic conditions. Many of these drugs are injectable medications or have special administration requirements. These medicines tend to cost more than others and are only sold at specialty pharmacies. You should check your plan for your in-network specialty pharmacy options.

What to do if you need a brand-name drug

Don't over pay for medications. You could be charged more if you take a brand-name medication instead of a generic. If there's a medical reason you need a brand-name medication, please:

  1. Check the Request for Waiver of Brand Drug Fees (PDF) to see if you meet our requirements.
  2. Send a Safety MedWatch Form to the FDA to tell us why you can't take the generic.
  3. Send us a Request for Waiver Faxback Form (PDF) with your details.

Preventive pharmacy benefits

Preventive drugs1 are drugs that help prevent disease or other health conditions – think vaccines to prevent flu or iron supplements to prevent iron deficiency anemia.

Most Blue Cross NC plans have an Affordable Care Act, or ACA, preventive drug benefit, which means these medications are available to you at no additional cost or at a reduced cost.

See ACA Preventive Drug List (PDF)

Health Savings Account benefits

In addition to preventive drugs, which are covered under all prescription drug plans, some plans with Health Savings Accounts (HSAs)2 provide additional preventive coverage of drugs for certain chronic conditions.

The HSA preventive benefit enhancement is available on specific high-deductible health plans. This benefit waives the deductible for preventive drugs for certain chronic conditions.

See HSA Preventive Drug List (PDF)

Prescription drug tiers

Your health plan includes a list of covered medicines called a formulary. Within your formulary, medications are classified into categories called tiers.

Your prescription drugs could be in one of the four-tier, five-tier, or six-tier formularies. These tiers are based on drug usage, cost, and clinical effectiveness. This helps determine how much you may have to pay for your medicine. 

You can use our Find Care tool to search for a drug within your specific formulary.

Four-tier formularies

  • Tier 1: Lowest-cost tier – Most are generic.
  • Tier 2: Medium-cost tier – Most are generic, and some are brand name.
  • Tier 3: Higher-cost tier – Most are brand name, and some are specialty.
  • Tier 4: Highest-cost tier – Most are specialty.

Five-tier formularies

  • Tier 1: Lowest-cost tier – Most are generic.
  • Tier 2: Medium-cost tier – Most are generic, and some are brand name.
  • Tier 3: High-cost tier – Most are brand name.
  • Tier 4: Higher-cost tier – Most are brand name, and some are specialty drugs.
  • Tier 5: Highest-cost tier – Most are specialty.

Six-tier formularies

  • Tier 1: Lowest-cost tier – Most are generic.
  • Tier 2: Medium-cost tier – Most are generic, and some are brand name.
  • Tier 3: High-cost tier – Most are brand name.
  • Tier 4: Higher-cost prescription drugs – Most are brand name, and some are specialty.
  • Tier 5: Some of the highest-cost tier – Most are specialty.
  • Tier 6: Highest-cost tier – Most are specialty.

Non-formulary prescription drugs

Medications not included in your formulary are called non-formulary drugs. If your doctor prescribes a medication that isn’t covered on your formulary, he or she will have to fill out a form to request a non-formulary medicine for you.

Learn About Non-Formulary Drugs