Formulary
A formulary is the list of medications a health plan covers, organized into cost tiers and managed by its PBM — the document that decides what a prescription costs an insured patient at the counter.
- The covered-drug list of a plan, managed by its PBM
- Tiered copays; rebates influence placement
- Utilization management attaches to expensive tiers
- DTC programs run their own treatment-catalog “formulary”
How formularies work
Drugs are placed in tiers — generics low, preferred brands middle, specialty high — with copays rising by tier. Placement is negotiated: manufacturers pay rebates for favorable positions, and PBMs attach utilization management (prior authorization, step therapy, quantity limits) to expensive entries. Exclusion lists name drugs not covered at all, and formulary decisions on GLP-1s have repeatedly made national news for exactly this reason.
Formularies and cash-pay programs
A different sense of the word matters in DTC: the program formulary — the treatment catalog a telehealth service offers and its clinicians may prescribe from. Building it means choosing medications, dose forms, and pharmacy sources (retail, mail, compounded) that clinicians can match to patients. Insurance formularies answer what is covered; program formularies answer what we offer — a distinction worth keeping crisp in team vocabulary.
Compliance handled, so you can build
Lithos runs the clinicians, pharmacies, and 50-state rules behind your care program — one API.
Frequently asked questions
Who decides what is on a formulary?
The PBM’s pharmacy and therapeutics committee, shaped by clinical evidence and manufacturer rebate negotiations.
Why was my patient’s drug not covered?
It may be excluded, in a high tier, or gated behind prior authorization or step therapy — the formulary entry tells you which.
What is a formulary in a DTC program?
The internal catalog of treatments clinicians may prescribe — the program’s clinical menu, distinct from any insurance list.