Medicare Part D drug tiers, decoded

Medicare Part D plans organize drugs into tiers, and your tier determines your copay. The tier system sounds arbitrary but it’s rule-based — understanding it saves real money.

The standard 5-tier structure

• Tier 1 — Preferred Generic. Cheap generic drugs. Copay: $0-$5 typical. Example: lisinopril, metformin.
• Tier 2 — Generic. Other generics not on the preferred list. Copay: $5-$15 typical.
• Tier 3 — Preferred Brand. Brand-name drugs the plan has negotiated favorable rebates on. Copay: $20-$50 typical. Example: Eliquis, Ozempic (on many plans).
• Tier 4 — Non-Preferred Brand / Non-Preferred Drug. Brand-name drugs without negotiated rebates, or generics with cheaper alternatives the plan prefers. Copay: $50-$100 typical.
• Tier 5 — Specialty. High-cost specialty drugs (typically >$950/month cost to the plan). Copay is usually coinsurance (25-33% of drug cost), not a fixed dollar amount. Example: Humira, Keytruda, Enbrel.

Some plans have 4 tiers or 6 tiers, but the underlying logic is the same: cheaper to plan = lower tier = lower copay.

How to find your drug’s tier

1. Find your plan’s Formulary document on the plan’s member site.
2. Search for your drug by brand or generic name.
3. The tier number is in the formulary table next to the drug.
4. Note any restriction codes: “PA” (prior authorization), “ST” (step therapy), “QL” (quantity limit).

Our prior-authorization lookup aggregates tier data for 7,000+ drug × payer combinations from CMS SPUF data.

How to get a drug moved to a lower tier

This is called a tiering exception. It’s real, under-used, and often successful.

• Eligible when: your drug is on Tier 3 or higher, and a lower-tier alternative exists but would be less effective or contraindicated for you.
• How to file: your prescriber submits a tiering-exception request form with clinical justification. Plans must respond within 72 hours (24 expedited).
• What documentation wins: prior trials of the lower-tier drug that failed, contraindications, or evidence the lower-tier drug would cause adverse events.
• Success rate: well-documented tiering exceptions approve 30-50% of the time. Worth filing even if odds are uncertain.

The coverage gap (“donut hole”)

Historically, after you and your plan spent a certain amount on drugs (~$5,030 in 2025), you entered the coverage gap where you paid 25% of drug cost. The Inflation Reduction Act is phasing this out — by 2025, coverage-gap discount became 25% on brands, and in 2026 the out-of-pocket cap is $2,000. After $2,000 out-of-pocket in Part D spending in a year, you pay $0 for covered drugs the rest of that year.

Extra Help / Low Income Subsidy (LIS)

If your income is below 150% FPL, you may qualify for Extra Help, which caps your copays at ~$5 for generics and ~$12 for brands — regardless of tier. Apply through ssa.gov. The 2024 Inflation Reduction Act expanded Extra Help eligibility.