Step Therapy Rules: How Insurance Forces You to Try Generics Before Brand-Name Drugs

Imagine your doctor prescribes a medication that works well for your condition. You’re ready to fill the prescription-until your insurance denies it. Why? Because you haven’t tried three cheaper generics first. This isn’t a glitch. It’s step therapy-a common rule in health plans that forces patients to "fail" on lower-cost drugs before getting access to what their doctor actually ordered.

What Is Step Therapy, Really?

Step therapy, sometimes called "fail-first," is a cost-control tactic used by health insurers. It requires you to try one or more generic or older medications before they’ll pay for a newer, more expensive brand-name drug-even if your doctor believes the cheaper option won’t work for you.

Here’s how it typically works:

• Step 1: Try a generic version of the drug (often $5-$15 per month)
• Step 2: If that doesn’t work, try another generic or an older brand-name drug
• Step 3: Only then can you get approval for the original medication your doctor prescribed

For example, if you have rheumatoid arthritis and your doctor prescribes a biologic like Humira, your insurer might require you to try methotrexate, then sulfasalazine, then etanercept-all before approving Humira. Even if you’ve tried those before and they didn’t help.

This isn’t just about savings. It’s a system built into most employer-sponsored plans and many Medicare Part D plans. About 40% of all prescription drug coverage policies in the U.S. include step therapy requirements, according to NIH research from 2022. That means nearly half of insured Americans could be stuck in this cycle.

Why Do Insurers Use Step Therapy?

Insurers don’t use step therapy because they dislike your doctor’s judgment. They use it because drug prices are skyrocketing.

Brand-name drugs can cost hundreds or even thousands of dollars a month. Generics? Often under $20. A 2021 Congressional Budget Office analysis found that step therapy can reduce pharmaceutical spending by 5-15% depending on the condition. For insurers managing millions of prescriptions, that adds up fast.

But here’s the catch: step therapy wasn’t created by doctors. It was created by insurers after policymakers failed to rein in drug prices. As the NIH noted in 2022, insurers stepped in to control costs because no one else would.

Some insurers argue step therapy ensures patients don’t get expensive drugs they don’t need. But patients and doctors see it differently. The American College of Rheumatology says step therapy puts lives at risk. Why? Because waiting weeks or months for approval can mean irreversible joint damage, worsening pain, or hospitalization.

When Step Therapy Goes Wrong

Real people are paying the price.

One Reddit user, "ChronicPainWarrior," shared their story: after being denied a biologic for rheumatoid arthritis, they had to try three different NSAIDs over six months. By the time they got approval, their joints were permanently damaged. Their pain didn’t just linger-it got worse.

The Arthritis Foundation surveyed over 1,000 patients in 2022. Of those, 68% said step therapy caused negative health outcomes. Over 40% reported disease progression during the required waiting period. And 28% eventually gave up on treatment entirely because the paperwork was too overwhelming.

It gets worse when you switch jobs or insurance plans. Even if you’ve been on the same medication for years, your new insurer might force you to restart the entire step therapy process. That means stopping a drug that works, trying ineffective ones, and waiting again. For someone with a chronic condition, that’s not just inconvenient-it’s dangerous.

What’s Allowed Under the Law?

You’re not completely powerless. Federal and state laws require insurers to offer exceptions.

As of 2026, 29 states have passed laws forcing insurers to grant step therapy exceptions under certain conditions. The Safe Step Act, introduced in Congress multiple times since 2017, outlines five clear situations where insurers must approve your doctor’s prescription right away:

• You’ve already tried the required drug and it didn’t work
• The required drug would cause severe or irreversible harm
• The required drug is contraindicated for your medical history
• Delaying treatment would prevent you from doing daily activities
• You’re already stable on your current medication and it was previously approved

But here’s the problem: knowing the rules doesn’t mean you get quick access. Blue Cross Blue Shield of Michigan says they review exceptions in 72 business hours for standard cases and 24 hours for urgent ones. But in practice, many patients wait four to eight weeks. That’s longer than most insurance appeals.

Doctors are drowning in paperwork. According to the American College of Rheumatology, physicians spend an average of 18.3 hours per week just handling prior authorization and step therapy requests. That’s nearly half a workday-not treating patients, but fighting insurers.

How to Fight a Step Therapy Denial

If your insurance denies your prescription, don’t accept it. Here’s what to do:

1. Ask your doctor to file an exception request. They need to submit medical records showing why the required drugs won’t work for you. This isn’t a form letter-it needs specifics: lab results, past treatment history, side effects, disease progression.
2. Call your insurer. Ask for the exact reason for denial and the name of the reviewer. Get a reference number.
3. Submit a formal appeal. Most insurers have a 30-day window to respond. Use the exception criteria from the Safe Step Act to structure your argument.
4. Escalate if needed. If the appeal is denied, contact your state’s insurance commissioner’s office. Many have consumer advocacy teams that can intervene.
5. Check for manufacturer assistance. Over 78% of big pharmaceutical companies offer co-pay cards or free drug programs. These sometimes bypass step therapy entirely.

Don’t wait. The longer you delay, the more damage can occur-especially with conditions like multiple sclerosis, Crohn’s disease, or psoriatic arthritis.

Who’s Not Covered?

Here’s the biggest loophole: self-insured employer plans.

Most large companies (like Amazon, Walmart, or Google) self-insure. That means they pay for healthcare costs directly instead of buying a plan from an insurer. These plans are governed by federal law (ERISA), not state laws. So even if your state has strong step therapy protections, your employer’s plan doesn’t have to follow them.

That’s a problem because over 61% of Americans get their insurance through self-insured employer plans. That means most people with employer coverage are stuck with whatever rules the company’s third-party administrator decides to enforce.

And it’s getting worse. Avalere Health predicts that by 2025, step therapy will apply to 55% of specialty drug prescriptions-up from 40% today. More conditions. More delays. More barriers.

Is There Any Good Side to Step Therapy?

Yes-sometimes.

Not everyone needs the expensive drug. A 2023 GoodRx survey found that 17% of patients who were forced to try generics ended up doing just as well-or better-on the cheaper option. That’s a win for both patient and insurer.

But that’s not the norm. Most people aren’t being offered a choice-they’re being forced into a trial-and-error process that ignores their medical history. And when it fails, the consequences aren’t abstract. They’re real: chronic pain, lost workdays, emergency room visits, permanent disability.

What’s Changing?

There’s growing pressure to fix this system.

In 2023, 14 more states introduced new step therapy laws. Eight strengthened existing ones by adding strict time limits for decisions. The Safe Step Act is still alive in Congress, aiming to force self-insured plans to follow the same rules as fully-insured ones.

But until federal law changes, the system stays broken. Patients in states with strong protections might get faster approvals. Those in states without them? They’re on their own.

The truth? Step therapy isn’t about safety. It’s about cost. And right now, patients are the ones paying the price-in pain, time, and health.

What You Can Do Today

• Ask your doctor if your prescription is subject to step therapy before you leave the office.
• Keep a record of every medication you’ve tried, when, and how it affected you.
• If you’re denied, don’t wait. Start the exception process immediately.
• Check if your drug manufacturer offers patient assistance programs-they can cut costs and sometimes skip step therapy entirely.
• Join a patient advocacy group. Your voice matters.

Step therapy might be legal. But that doesn’t mean it’s fair. You have the right to timely, appropriate care. Don’t let a formulary rule take that away.