A "formulary" is the list of drugs that a Medicare plan will help pay for.
A formulary is divided into tiers. The lowest tiers are the most common, least expensive drugs.
Higher tiers are non-generic specialty drugs which are generally more expensive.
Typically a Medicare plan will require the customer to pay less for drugs in the lowest tier of the formulary.
Customers are required to pay more for drugs in higher tiers of the formulary.