New year, new formulary: Introducing the 6-tier Essentials Formulary

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Today’s pharmacy market is putting increasing pressure on employers, emphasizing the need for modernized formulary options with the ability to guide members to low cost, high value medications.

With the continued rise in prescription drug costs, largely driven by specialty medications and new therapies, it’s time to expand our formulary toolbelt. A traditional 4-tier approach can provide many opportunities for cost management but may lack the ability to distinguish between medications that vary significantly in cost and value.

In 2027, Premera is offering a new 6-Tier Essentials Formulary for large group plans. The redesigned structure modernizes pharmacy benefits by creating more precise alignment between clinical value, medication cost, and member cost share. The result is a formulary that provides employers with greater flexibility to manage pharmacy trends while continuing to support member access to appropriate therapies.

Comparing the 4-Tier and 6-Tier Essentials Formularies

The new formulary introduces two key changes. First, generic medications are divided into Value Generic and Preferred Generic tiers, allowing lower-cost generic options to receive the most favorable cost share. Second, specialty medications are divided into Preferred Specialty and Non-Preferred Specialty tiers, creating additional opportunities to steer utilization toward lower-net-cost specialty products and preferred biosimilars.

Together, these changes offer three key benefits for employers: better cost management, stronger specialty drug management, and improved member steerage.

Better cost management: The additional tiers provide more precision in benefit design and member incentives. Rather than grouping all specialty drugs or all non-preferred products together, employers can better align member cost sharing with the relative value of medications.

Stronger specialty drug management: Specialty drug costs account for a growing share of overall pharmacy spending. The new 6-tier structure separates medications into Preferred Specialty and Non-Preferred Specialty tiers. This distinction helps encourage the use of preferred specialty products and biosimilars when clinically appropriate.

Improved member steerage: Members receive clearer financial incentives to choose the most clinically sound and cost-effective medication. This may help reduce overall pharmacy spend while maintaining access to the highest value treatment options.

The 6-Tier Essentials Formulary enhances pharmacy benefits by providing more precise cost management tools, stronger specialty drug strategies, and greater flexibility for the future. For employers seeking to balance affordability, member experience, and clinical value, it offers a more targeted approach than the traditional 4-tier structure.

Contact your Premera representative to learn how the 6-Tier Essentials Formulary can expand the cost management tools available to your organization.