Generic prescription drugs are lower priced than brand-name medications that no longer have a patent. Generic medications are considered as effective as their brand-name counterparts.
Part D is prescription drug coverage.
Stand-alone prescription drug plans (PDPs) or Medicare Advantage (Part C) plans that include prescription drug coverage (MA-PDs) must provide a minimum standard level of coverage set by Medicare.
However, these plans can vary in the list of prescription drugs they cover. This list is called a formulary, and it classifies medications into tiers.
PDPs and MA-PDPs can be purchased from different Medicare-approved private companies, so formularies often vary from plan to plan or insurer to insurer.
Plans typically divide the medications in their formularies into tiers. They use these tiers to lower drug costs. Each tier costs a different amount. Typically, the lower tiers cost less than the higher ones.
Tiers typically break down like this:
- Tier 1 ($): generics
- Tier 2 ($$): preferred brand names
- Tier 3 ($$$): nonpreferred brand names
- Tier 4 ($$$$): speciality
The brand name is the original drug. It’s usually made by the manufacturer who created or discovered it. A pharmaceutical company has invested money in the drug:
- discovery
- research
- testing
- development
- production
- marketing
A patent protects the pharmaceutical company’s investment in the “brand.” This prevents other drug manufacturers from duplicating the formula and the drug.
When the patent granted to the originating pharmaceutical company expires, other pharmaceutical companies can then apply to the Food and Drug Administration (FDA) for permission to manufacture and sell a generic version of the original.
For FDA approval, the producers of the generic prescription drug must prove their version is the same as the brand name medication in all aspects, including:
- active ingredients
- concentration
- form (liquid, capsule, topical, etc.)
- dosage
Turn to the FDA to find the generic equivalent of a medication. Every quarter, the FDA updates a list of
Some of the most commonly prescribed generic medications in the United States include:
- amlodipine (generic for Norvasc)
- azithromycin (generic for Zithromax, Z-PAK)
- levothyroxine (generic for Synthroid)
- lisinopril (generic for Prinivil or Zestril)
- metformin (generic for Glucophage)
- simvastatin (generic for Zocor)
Part A is hospital insurance, so it doesn’t cover your prescription medications; however, if you receive a medication while you’re an inpatient in a setting like the hospital, Part A will cover it.
Part B is medical insurance. Although it doesn’t cover most medications you get at the drugstore, it does include limited prescription drug coverage. This includes:
- certain preventive medications, including flu shots and pneumococcal shots
- injections you get in a doctor’s office
- drugs used with some types of durable medical equipment
- certain oral cancer drugs
- certain medications in a hospital outpatient setting
To get Medicare coverage for most prescription drugs, including for chronic conditions such as high blood pressure, you must purchase a stand-alone PDP or MA-PD plan.
Most Medicare prescription drug plans divide the medications they cover into tiers, each costing a different amount. The lowest tier is typically the most affordable and features generic versions of brand-name medications.