Step Therapy Rules: Insurance Requirements to Try Generics First

If you’ve ever been told by your pharmacy that you can’t get the medication your doctor prescribed unless you try something cheaper first, you’ve run into step therapy. It’s not a new idea, but it’s become a big part of how health insurance works today - especially when it comes to prescription drugs. The goal? Save money. The catch? You might have to suffer through weeks or months of ineffective treatment before you get the one your doctor actually recommended.

What Is Step Therapy, Really?

Step therapy, sometimes called a "fail-first" policy, is a rule insurers use to control drug costs. It forces patients to try one or more lower-cost medications - usually generics - before the insurance will pay for a more expensive brand-name drug or specialty medication. This isn’t random. Insurers organize drugs into tiers. Step one is almost always the cheapest option. Step two is the next, and so on. You have to "fail" at each step before moving up.

For example, if your doctor prescribes a biologic for rheumatoid arthritis that costs $3,000 a month, your insurer might require you to try three different generic NSAIDs first. Even if those drugs didn’t work for you last time, or if they caused side effects, you still have to try them again. Only after those fail - according to the insurer’s definition - will they approve the drug your doctor picked.

According to a 2021 analysis in PubMed, about 40% of all health plan drug coverage includes step therapy rules. That number has been rising since 2018. Employer-sponsored plans, Medicaid, and individual market plans all use it. But here’s the twist: it doesn’t apply to most generic drugs. Why? Because they’re already cheap. Step therapy mostly targets expensive brand-name drugs - especially those used for chronic conditions like arthritis, multiple sclerosis, or psoriasis.

Why Do Insurers Use It?

Insurers don’t use step therapy because they’re trying to make life harder for patients. They use it because drug prices keep going up, and someone has to pay for it. Between 2015 and 2022, the average cost of specialty drugs jumped by over 60%. At the same time, policymakers didn’t pass laws to cap those prices. So insurers stepped in - literally - to control costs themselves.

The National Institutes of Health found that step therapy can reduce pharmaceutical spending by 5% to 15%, depending on the drug class. For a big insurance company covering hundreds of thousands of people, that adds up to millions saved each year. That’s why nearly every major insurer - Aetna, Blue Cross, UnitedHealthcare - has some version of this policy built into their formularies.

They argue it’s not just about saving money - it’s about making sure patients get the most effective treatment for their condition. But here’s the problem: the most effective treatment isn’t always the cheapest. And forcing someone to try a drug that doesn’t work - or worse, harms them - isn’t medical care. It’s a gamble with someone’s health.

How It Hurts Patients

Real people are getting caught in this system. A Reddit user named "ChronicPainWarrior" shared how they spent six months trying three different NSAIDs before getting approval for a biologic. During that time, their joint damage worsened. They lost mobility. They couldn’t work. Their doctor said the delay caused permanent harm.

The Arthritis Foundation surveyed patients in 2022 and found that 68% experienced negative health outcomes because of step therapy. Over 40% said their condition got worse while they were stuck on the required cheaper drugs. Some didn’t even finish the trial - they just gave up. One in four stopped taking their medication entirely because the paperwork was too overwhelming.

And it’s not just arthritis. People with Crohn’s disease, lupus, epilepsy, and even depression have reported similar stories. One woman in Michigan had to wait eight weeks for an exception to her step therapy rule. Her MS symptoms flared. She ended up in the hospital. The insurer approved the drug after she was already hospitalized.

There’s also the issue of switching plans. If you change jobs - and your insurance changes with it - you might have to restart the entire step therapy process. Even if you’ve been on the same drug for five years, your new insurer will make you try the cheaper ones again. That’s not just inconvenient. It’s dangerous.

When Exceptions Are Allowed

You’re not completely stuck. There are rules - and they’re getting stronger. As of 2022, 29 states passed laws requiring insurers to allow exceptions to step therapy. These exceptions aren’t optional. If you meet certain criteria, the insurer must approve your preferred drug without delay.

The Safe Step Act, introduced in Congress multiple times since 2017, outlines five clear cases where exceptions must be granted:

• You’ve already tried the required drug and it didn’t work.
• The required drug would cause serious harm or side effects.
• The drug is contraindicated for your condition or medical history.
• Delaying treatment would cause irreversible damage or loss of function.
• You’re already stable on the drug your doctor prescribed, and you’ve been covered for it before.

These aren’t just suggestions. In states like Virginia, the law says insurers must have a clear process for exceptions - and they must respond within 72 hours for standard requests and 24 hours for urgent cases. But here’s the catch: those rules don’t apply to everyone.

Self-insured employer plans - which cover about 61% of Americans - are regulated by federal law (ERISA), not state law. That means even if your state has strong protections, your employer’s plan might not have to follow them. And most large companies are self-insured. So unless federal legislation passes, millions of people will keep getting caught in the gaps.

What You Can Do

If your insurer denies your drug because of step therapy, you’re not powerless. Here’s what to do:

1. Ask your doctor to file an exception. They’re the only ones who can legally prove medical necessity. They need to submit records showing why the required drugs won’t work for you - past failures, side effects, lab results, or specialist notes.
2. Know your state’s rules. Check if your state has step therapy laws. Even if you’re in a self-insured plan, some insurers voluntarily follow state guidelines.
3. Call your insurer. Ask for a copy of their step therapy policy. It’s your right. They’re required to provide it. Look for the exception process and timeframes.
4. Document everything. Keep emails, letters, call logs. If they delay or deny, you’ll need proof for appeals.
5. Ask about patient assistance programs. Many drugmakers offer co-pay cards or free trials that can bypass step therapy - especially if you qualify based on income.

Some patients do get lucky. A 2023 GoodRx survey found that 17% of people ended up better off on the generic drug they were forced to try. But that’s the exception, not the rule. For most, step therapy isn’t about finding the best drug - it’s about finding the cheapest one.

The Bigger Picture

Step therapy is a symptom of a broken system. Drug prices are sky-high. Government doesn’t regulate them. So insurers do - with rules that shift the burden onto patients and doctors. The result? More paperwork, more delays, more pain.

Experts predict that by 2025, step therapy will apply to 55% of specialty drug prescriptions - up from 40% today. That means more people will face this fight. And unless federal law changes, the people most affected - those with chronic, life-altering conditions - will keep paying the price in health, time, and stress.

It’s not about whether step therapy saves money. It does. But it’s also about whether the cost is worth it. When a patient’s joints are destroyed, their nerves are damaged, or their disease progresses because they had to wait - who’s really saving?