Prescription Drug Benefits

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Frequently Asked Health Insurance Questions

PRESCRIPTION DRUG BENEFITS
What is a brand-name prescription drug?
What is a generic drug?
Why should I choose generic drugs?
What are the differences between brand-name and generic drugs?
What is a three-tier drug benefit or formulary or preferred drug list?
Does a formulary/preferred drug list limit choices?

Q.	What is a brand-name prescription drug?
A.	Prescription drug manufacturers patent all new drugs when they’re discovered and these are called brand-name drugs and can be very expensive. After the original patent runs out, a generic equivalent can be manufactured and distributed.
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Q.	What is a generic drug?
A.	Several companies can manufacture generic drugs once the original patent runs out. This generic version of the drug must contain the same active ingredients in the same amounts as the brand-name drugs. This process helps ensure that brand-name and generic drugs compare to each other.

Q.	Why choose generic drugs?
A.	Generic drugs can cost much less than their brand-name equivalent and help lower health-care expenses. Generic drugs may also help the insured lower their out-of-pocket expenses.

Q.	What are the differences between brand-name and generic drugs?
A.	The primary difference between generic and brand-name is the cost. The Food and Drug Administration (FDA) must deem generic drugs to be equally effective as their brand-name counterpart. The same FDA quality and safety requirements must be followed for both generic and brand-name drugs.
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Q.	What is a three-tier drug benefit or formulary/preferred drug list?
A.	A formulary/preferred drug list identifies drugs that a physician may wish to consider when deciding which drug to prescribe to a patient. Tiered drug plans can help save money when customers use less expensive drugs or drug therapies. A formulary/preferred drug list: Promotes appropriate and cost-effective therapy. Provides physicians with valuable information about other available drug therapies. Gives information that may help the insured in discussing medications with physicians and pharmacists

Q.	Does a formulary/preferred drug list limit drug choices?
A.	Doctors prescribe the drugs that are proper for individual situations. Having a plan with a formulary/preferred drug list does not limit the selection of drugs, instead it allows customers to have lower out-of-pocket expenses when they use drugs from the formulary/preferred drug list.
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