Insurance Changes and Generic Switching: How Formulary Updates Affect Your Prescription Costs in 2025

Every January, millions of people on Medicare Part D wake up to find their prescriptions have changed - not because their doctor switched them, but because their insurance plan did. If you’re taking a brand-name drug like Humira, Humalog, or Stelara, you might be surprised to see your copay jump from $35 to $113 overnight. Or worse, your medication might not be covered at all. This isn’t a mistake. It’s a formulary update.

What Exactly Is a Formulary?

A formulary is a list of drugs your insurance plan covers. It’s not random. Insurance companies and pharmacy benefit managers (PBMs) like CVS Caremark, OptumRx, and Express Scripts build these lists to control costs. They group drugs into tiers: Tier 1 for cheap generics, Tier 2 for non-preferred brands, Tier 3 for expensive brands, and Specialty for high-cost drugs like biologics and cancer treatments.

In 2025, the rules changed big time. Thanks to the Inflation Reduction Act (IRA) passed in 2022, Medicare Part D plans had to overhaul their formularies. The biggest shift? The donut hole is gone. Before 2025, once you spent $4,430 on drugs, you hit a coverage gap where you paid 25% to 50% out of pocket. Now, once you hit $5,030, you’re automatically in the catastrophic phase - paying only 5% or a small copay, no matter how much your meds cost.

Why Are Generics and Biosimilars Taking Over?

Insurers are pushing generics harder than ever. In 2025, 78% of standalone Medicare drug plans (PDPs) made major moves to switch patients from brand-name drugs to cheaper generics. That’s nearly double the rate in Medicare Advantage plans (MAPDs), which only saw 42% change.

Biosimilars are the new frontier. These are near-identical copies of biologic drugs - complex, expensive medications made from living cells. Humira, for example, costs over $700 a month. Its biosimilar, Amjevita, costs about half. In 2024, the FDA approved 17 new biosimilars - a 34% jump from the year before. PBMs are now comfortable covering them even without the official "interchangeable" label, thanks to updated FDA guidance in May 2024.

You might hear "non-medical switching" - that’s when your insurer switches your drug for cost reasons, not because your doctor thinks it’s better. According to healthcare attorney Scott Glovsky, this kind of switch increased 23% in 2024. One Reddit user reported her Humalog insulin copay jumped from $35 to $113. Another, "ArthriticMom," said switching from Humira to Amjevita saved her $450 a month - with zero side effects.

Which Drugs Are Being Removed or Moved?

In 2025, CVS Caremark removed 16 drugs from its formulary, including nine specialty drugs like Herzuma and Ogivri. But it added 18 new ones - 11 of them biosimilars, including Kanjinti and Trazimera, which replace the removed drugs. UnitedHealthcare moved several diabetes and respiratory drugs to higher tiers. Anthem and Priority Health also made changes, but fewer than in 2024.

The most common targets? Drugs with biosimilar alternatives, especially for arthritis, diabetes, and autoimmune conditions. Insurers are betting that patients will tolerate the switch - and most do. Cigna’s survey found 73% of people who got switched were able to get exceptions approved. But here’s the catch: 38% waited 10 to 14 days for approval. That’s two weeks without medication.

How to Spot a Formulary Change Before It Hits

Insurers are required to notify you 60 days before a change takes effect - unless it’s a newly approved generic. Then, they only need 30 days’ notice. You’ll get a letter, an email, or a notice in your online portal. But don’t wait for it.

Start checking your plan’s formulary between October and December each year. Go to your insurer’s website. Look for the "Formulary" or "Drug List" section. Search for your exact medication - not just the brand, but the generic too. If it’s on Tier 1, you’re good. If it’s been moved to Tier 3 or removed, act fast.

Talk to your pharmacist. They see these changes every day. They can tell you if there’s a cheaper alternative, or if your drug is being replaced by a biosimilar. Many pharmacies offer free formulary checks.

What If Your Drug Is No Longer Covered?

You have two options: appeal or switch.

An exception request lets you ask your plan to cover your drug anyway. There are two types:

• Standard exception: For non-urgent cases. Takes 72 hours to process. Approval rate: 82.3% for tier changes, but only 47.1% if the drug is completely removed.
• Expedited exception: For medical emergencies. Must be approved in 24 hours. You need your doctor to say your health is at risk if you switch.

Your doctor’s letter matters. It needs to say why the brand drug is necessary - not just "I prefer it." Mention side effects, past failures with generics, or documented clinical reasons.

If the exception is denied, your pharmacist might still have a solution. Sometimes, a different generic version of the same drug is covered. Or a biosimilar might be available. Don’t assume your only option is to pay full price.

What’s Coming in 2026?

The real game-changer is the Medicare Drug Price Negotiation Program (MDPNP). Starting January 1, 2026, Medicare will require all Part D plans to cover 10 specific drugs that the government negotiated lower prices for. The first batch includes Stelara, Prolia, and Xolair - all of which cost over $1,000 per dose.

That means even if your plan dropped Stelara in 2025, they must cover it in 2026. And they’ll have to cover its biosimilars too. Experts predict 65% of plans will require generic or biosimilar substitution for all non-protected drugs by then.

The FDA expects biosimilar market share to hit 45% for targeted therapies by 2027, up from 28% in 2024. That’s not just a trend - it’s the new normal.

How to Protect Yourself

Here’s your simple checklist for 2025 and beyond:

1. Check your plan’s formulary between October and December.
2. Search for every drug you take - brand and generic.
3. Call your pharmacist and ask: "Is my drug being removed or moved to a higher tier?"
4. If it’s being changed, ask your doctor about alternatives - especially biosimilars.
5. Don’t wait for a letter. If you’re on a chronic medication, assume it’s at risk.
6. Know your exception rights. If your drug is removed, file for an expedited exception if you’re at risk.
7. Track your out-of-pocket costs. With the $2,000 cap in 2025, you’ll never pay more than that - but you still need to know what you’re spending.

Bottom Line: You’re Not Powerless

Insurance companies are changing drug lists to save money. That’s not going to stop. But you’re not just a number on a spreadsheet. You have rights. You have options. You have time - if you act early.

The goal isn’t to fight every change. It’s to stay informed. To know when a switch might hurt you - and when it might actually help. A biosimilar isn’t a downgrade. For most people, it’s a smarter, cheaper way to get the same treatment.

Your health doesn’t wait for paperwork. Don’t wait for your insurer to tell you what’s changing. Find out before January 1.