Pharmacy glossary

A formulary is a list of preferred generic and brand-name medications, approved by the Food and Drug Administration (FDA), that are covered under your Blue Shield Outpatient Prescription Drug Benefit. 

The Blue Shield Pharmacy and Therapeutics (P&T) Committee develops, maintains, and regularly updates the formulary.

The placement of drugs on tiers is based on P&T committee recommendations after a review of the medical evidence and nationally recognized clinical guidelines for drug safety and effectiveness. The P&T committee also considers drug price i when safety and effectiveness are similar for drugs in the same class.

Mail service pharmacy
Blue Shield offers an easy-to-use mail service prescription drug program through our contracted mail service pharmacy. You can save time and money using the mail service drug program. And, depending on your plan, it can be a convenient way to fill maintenance medications for up to a 90-day supply.

Network Pharmacies
A pharmacy that has a contract with Blue Shield to provide covered services to our members. 

Network pharmacy that offers preferred cost-sharing
A pharmacy in a network that offers both standard cost-sharing and preferred cost-sharing. Prescription costs may be lower if members choose to fill at pharmacy that offers preferred cost-sharing.

Network pharmacy that offers standard cost-sharing
Members have access to all the pharmacies within our network, but their cost-share at a pharmacy from their standard cost-sharing network will be the same regardless of which pharmacy they choose to fill  their prescriptions at. 

Maintenance medications
Maintenance drugs are those prescribed to treat a chronic or long-term medical conditions such as asthma, diabetes, high blood pressure, or high cholesterol, and are taken on an ongoing, regular basis to maintain health.

Participating pharmacy
"Participating pharmacy" means a pharmacy that has an agreement with Blue Shield to provide covered services to our members.

Pharmacy and Therapeutics Committee
Our Pharmacy and Therapeutics (P&T) Committee is made up of independent physicians and pharmacists who are not Blue Shield of California employees. They are expert consultants  and include specialists in various fields. The P&T Committee reviews and updates the formulary list each quarter so that it includes safe and effective drugs approved by the Food and Drug Administration (FDA). They update and review medication coverage criteria to reflect current standards of practice. They also review quality assurance programs to enhance Blue Shield's quality of care. 

Prior authorization
Drug prior authorization is a process to obtain pre-approval for coverage of a prescription medication. This approval  ensures that you receive medications that are safe and effective for your condition. Your doctor may provide information for a prior authorization review by calling or faxing a form to Blue Shield Pharmacy Services. Your doctor will be notified whether or not your prescription is approved for coverage.

The Blue Shield P&T Committee determines prior authorization coverage requirements   to ensure that medications are prescribed for medically necessary reasons, used safely as recommended by the FDA and in medical studies, and used when formulary alternatives have been considered first.
Drugs require prior authorization when:

  • Other drugs are recommended as first-choice treatment, based on nationally recognized clinical guidelines, the FDA, or  medical literature.
  • There is no significant clinical advantage compared with other formulary drugs that treat the same condition, based on clinical study results.
  • The drug should be reserved for rare or uncommon conditions.
  • The drug has a high potential for toxicity, abuse, or misuse.
  • The dose, prescription quantity, or duration of use exceeds FDA recommendations
  • Finally, prior authorization helps keep prescription costs affordable by suggesting use of formulary drugs first.


Quantity limit
Quantity limits are limits consistent with FDA-approved and/or guideline-supported dosing or durations to minimize side effects and reduce inappropriate overuse or long-term use. These limits promote quality and safety. Limits may be per prescription or for a defined period of time.

Specialty pharmacy
Specialty pharmacies fill prescriptions used to treat certain complex or chronic conditions that usually require close monitoring and special handling. You obtain specialty drugs from a Blue Shield network specialty pharmacy. Select drugs may not be available for distribution through the Network Specialty Pharmacy, in which case you may  obtain it through a non-network specialty pharmacy.

Step therapy
Step therapy is the practice of beginning drug therapy for a medical condition with drugs considered first-line for safety and cost-effectiveness, then progressing to other drugs that may have more side effects or risks or that are more costly. The P&T Committee may determine that coverage of selected drugs requires step therapy with first-line drugs before covering the prescribed medication. Step therapy requirements are based on how the FDA recommends that a drug should be used, nationally recognized treatment guidelines, medical studies, information from the drug manufacturer, and the relative cost of treatment for a condition. Other common terms used for step therapy are: “prerequisite therapy,” “prior therapy,” or “step therapy protocol.”

If step therapy coverage requirements are not met for a prescription and your doctor feels that the medication is medically necessary for you, your doctor may request an exception to the coverage requirements by requesting a prior authorization review.

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Page last updated: 10/01/2023

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