In health insurance, drug tiers refer to the different levels of coverage for prescription medications within a plan’s formulary. Each tier typically has a different cost-sharing requirement, such as copayments or coinsurance.

1. Tier 1: Usually includes generic drugs, which are the least expensive option and have the lowest copayments.
2. Tier 2: Contains preferred brand-name drugs, which are more expensive than generics but are still covered at a lower cost compared to non-preferred drugs.
3. Tier 3: Covers non-preferred brand-name drugs, which often have higher copayments due to their higher costs.
4. Tier 4: Generally includes specialty drugs, which are high-cost medications used to treat complex or chronic conditions, often requiring higher out-of-pocket costs.