Which formulary tier corresponds to preferred generics (lowest cost)?

• A. Formulary Tiers 1
• B. Formulary Tiers 2
• C. Formulary Tiers 3
• D. Formulary Tiers 4

Answer: (A)

In formulary design, drugs are grouped into tiers that determine how much a patient pays. Lower tiers carry the smallest copays, and generics are placed in the lowest tier to encourage their use. Preferred generics, being the most cost-effective option, sit in that first, lowest-cost tier. Higher tiers represent more expensive options—often preferred brands in the next tier, non-preferred or non-formulary drugs in another, and specialty medications in the highest tier—so they come with higher copays or more restrictions. Therefore, the option that corresponds to the lowest cost for preferred generics is the first tier.