Medicare Glossary

Brand-name drug

A prescription drug sold under its trademarked name. Brand-name drugs are typically more expensive than generic alternatives and may be in a higher formulary tier, requiring a higher copay or coinsurance under Part D.

Formulary

A list of prescription drugs covered by a Medicare Part D plan or Medicare Advantage plan with drug coverage. Drugs are organized into tiers, with each tier having a different cost. Plans can change their formularies annually.

Also known as: Drug list, Preferred drug list

Generic Drug

A prescription drug that has the same active ingredients, dosage, and effectiveness as a brand-name drug but is sold at a lower price after the brand-name patent expires. Generic drugs are typically in lower Part D tiers with lower copays.

Tier

A level in a Part D formulary that determines how much you pay for a drug. Most plans have 4–5 tiers. Generic drugs are typically in lower tiers with lower copays; brand-name and specialty drugs are in higher tiers with higher copays or coinsurance.

Also known as: Drug tier