Drugs on a formulary are often organized into different drug “tiers”. Your cost depends on which drug tier your drug is in. For example, a plan may form tiers this way: Tier 1 – Generic drugs. Tier 2 – Preferred brand-name drugs. Tier 3 – Non-preferred brand name drugs. Tier 4 – unique or high-cost specialty drugs.

References

https://www.patientadvocate.org/explore-our-resources/understanding-health-insurance/understanding-drug-tiers/
https://www.uhc.com/news-articles/medicare-articles/what-is-a-tiered-formulary-and-what-does-it-mean-for-me