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What are Part D drug tiers and copays?

Every plan sorts drugs into tiers and prices them accordingly. Here is what each tier means and where the real money is.

Updated August 17, 2026 · 2 min read

A tier is a pricing category. Every Part D plan sorts covered drugs into tiers, and the tier determines what you pay. The same medication can be tier 2 on one plan and tier 4 on another.

The usual tier structure

• Tier 1, preferred generics. Lowest copay, often a few dollars or nothing.
• Tier 2, generics. Low copay.
• Tier 3, preferred brand name drugs. Moderate copay.
• Tier 4, non preferred drugs. Higher copay, and includes both brands and some generics the plan has not favored.
• Tier 5, specialty. Usually coinsurance rather than a flat copay.

Plans are not required to use exactly this structure and some use six tiers or name them differently. The principle holds.

Copay versus coinsurance

This distinction matters more than the tier number.

• A copay is a fixed dollar amount. Predictable.
• Coinsurance is a percentage of the drug's cost. On a specialty medication costing thousands per month, that percentage is a large number.

Generic does not always mean tier 1

A generic can land on a non preferred tier if the plan has negotiated better terms on an alternative. People assume generic means cheapest and it is not always so.

Conversely, a brand name drug can be on a preferred tier if the plan has a strong rebate arrangement with the manufacturer. Check the actual tier rather than reasoning from the drug type.

The pharmacy changes the price too

Most plans have preferred and standard pharmacies. The same drug on the same tier can cost meaningfully different amounts depending on where you fill it.

Mail order is frequently the cheapest option for maintenance medications. Worth checking for anything you take every day.

Getting a drug to a lower tier

You can request a tiering exception, asking the plan to cover a drug at a lower tier's cost sharing. Your doctor supports the request by explaining why the preferred alternatives are not appropriate for you.

These succeed more often than people expect. Specialty tier drugs are usually excluded from tiering exceptions, which is the main limitation.

What to do about all this

1. When comparing plans, look at the tier each of your drugs sits on, not just the total.
2. Flag anything on a specialty tier and check the coinsurance percentage.
3. Check whether your pharmacy is preferred for that plan.
4. Price mail order for maintenance drugs.
5. If a drug is on a high tier and an alternative would work, talk to your doctor before switching plans.

See the full comparison method.