Which policy requires starting with a lower-cost drug and escalating only if treatment fails?

• A. Prior Authorization
• B. Access Rebate
• C. Formulary Tiers 1
• D. Step Therapy

Answer: (D)

Step therapy is a utilization-management approach that starts patients on the lowest-cost, clinically appropriate medication and only escalates to higher-cost options if the initial therapy fails or isn’t tolerated. This means the clinician first tries a cheaper drug with proven effectiveness, and if it doesn’t achieve the desired outcome, they move up to a more expensive option. The goal is to balance cost containment with maintaining clinical outcomes by requiring escalation only when necessary.

This differs from other policies: prior authorization requires explicit payer approval before a drug is covered, formulary tiers determine cost-sharing levels for drugs but don’t mandate stepping through options, and access rebates refer to financial deals with manufacturers rather than a treatment sequence.