Step Therapy Rules: How Insurance Forces You to Try Generics Before Approved Medications

If you’ve ever been told by your doctor to try a cheaper drug first - even if it’s not the one you or your doctor believe is best - you’ve run into step therapy. It’s not a suggestion. It’s a rule. And it’s built into the fine print of most health insurance plans.

What Is Step Therapy, Really?

Step therapy, also called a "fail-first" policy, is when your insurance company forces you to try one or more lower-cost medications before they’ll pay for the one your doctor prescribed. Usually, that means trying a generic version first. If that doesn’t work - or if it causes side effects - you then move to the next step. Only after failing at each step do you get approval for the original drug.

It sounds logical: start with the cheapest option. But in practice, it’s not about cost savings alone. It’s about control. Insurance companies use step therapy to limit spending on expensive brand-name drugs, especially biologics and specialty medications for conditions like rheumatoid arthritis, Crohn’s disease, or multiple sclerosis. According to a 2021 analysis, about 40% of health plan drug coverage now includes step therapy rules. That number has grown 15% since 2018.

For example, if your doctor prescribes Humira for rheumatoid arthritis, your insurer might require you to try three different generic NSAIDs first. Even if you’ve been on Humira for years and it’s working perfectly, switching plans could force you to restart the whole process.

Why Do Insurers Use Step Therapy?

The official reason? Cost control. Drug prices in the U.S. are among the highest in the world. Between 2010 and 2020, the average cost of a specialty drug rose over 200%. Insurers didn’t get to set those prices - but they’re the ones stuck paying them.

So they turned to step therapy. A 2021 Congressional Budget Office study found step therapy can reduce pharmaceutical spending by 5% to 15%, depending on the drug class. That’s millions of dollars saved for insurers. But those savings don’t always come without a cost to patients.

Insurers argue step therapy ensures patients get the most effective, least expensive treatment. But many doctors disagree. The American College of Rheumatology says step therapy can delay life-changing care. In some cases, waiting weeks or months for approval means permanent joint damage, worsening pain, or hospitalization.

How Step Therapy Works: The Typical Path

Most step therapy protocols follow a simple structure:

1. Step 1: Generic or older, low-cost drug (e.g., methotrexate for arthritis)
2. Step 2: Another generic or similar drug (e.g., sulfasalazine)
3. Step 3: Brand-name drug (e.g., Enbrel, Humira)

Your doctor writes a prescription for Step 3. Your pharmacy calls the insurer. The insurer says, "We won’t cover that yet. Try Step 1 first."

You fill the generic. It doesn’t work. Or it gives you nausea, dizziness, or worse. You go back to your doctor. They write another prescription - for Step 2. You try that. Still no improvement. Now you’re three months in. You’re in pain. Your condition is getting worse. Finally, you submit a step therapy exception request.

What’s Required to Get an Exception?

You don’t have to suffer through every step. Federal and state laws require insurers to allow exceptions - but only under specific conditions. The Safe Step Act, introduced multiple times in Congress, outlines five clear cases where insurers must approve an exception immediately:

• The required drug has already failed for you in the past
• Delaying treatment could cause serious or irreversible harm
• The required drug is medically contraindicated for you
• The drug would prevent you from doing daily activities
• You’re already stable on your current drug and have had prior approval

But getting that exception isn’t easy. Your doctor must submit medical records, lab results, and a letter explaining why the step therapy drugs won’t work. This isn’t a quick form. It’s often a 3- to 5-page letter. And insurers have no legal obligation to respond quickly.

Blue Cross Blue Shield of Michigan says it takes 72 business hours for a standard request. But in practice, patients report waiting four to eight weeks. The Arthritis Foundation found 68% of patients suffered health setbacks during these delays. One Reddit user, "ChronicPainWarrior," waited six months to get approved for a biologic after failing three NSAIDs. By then, their joint damage was irreversible.

Who’s Affected the Most?

Step therapy hits certain groups harder:

• Patients with chronic conditions: Rheumatoid arthritis, lupus, Crohn’s, MS - these diseases don’t wait. Every day without the right drug can mean more damage.
• People switching jobs or insurance: Even if you’ve been on the same medication for five years, a new plan forces you to restart step therapy from scratch.
• Low-income patients: If you can’t afford to pay out-of-pocket for the drug your doctor prescribed, you’re stuck waiting - or going without.
• Patients on specialty drugs: Over 90% of prescriptions are for generics. But for specialty drugs - the ones that cost $10,000+ a year - step therapy is almost guaranteed.

A 2022 survey by Step Therapy Awareness found 28% of patients gave up on treatment entirely because the process was too long, confusing, or humiliating. Others paid thousands out-of-pocket just to avoid the wait.

State Laws vs. Federal Gaps

As of 2025, 29 states have passed laws to protect patients from abusive step therapy practices. These laws require:

• Clear exception processes
• Time limits for responses (often 24-72 hours for urgent cases)
• Automatic approval if the patient is already stable on a drug

But here’s the catch: these laws only apply to fully-insured plans. That means if your employer pays your insurance directly - not through a state-regulated insurer - you’re outside the law. These are called self-insured plans. And they cover about 61% of Americans.

That’s why federal legislation like the Safe Step Act matters. Introduced in 2017 and reintroduced in 2021, it would force self-insured plans to follow the same rules as state-regulated ones. So far, it’s stalled in Congress.

What Can You Do?

If your insurer denies your prescribed drug and pushes you toward generics:

1. Ask your doctor to file an exception immediately. Don’t wait. Submit the request the same day you’re denied.
2. Get documentation. Lab results, previous treatment records, and your doctor’s letter are your best tools.
3. Know your state’s rules. Search for "step therapy exception [your state]" to find your rights.
4. Call your insurer’s member services. Ask for a case manager. Escalate if needed.
5. Check for patient assistance programs. Many drug makers offer free or discounted meds if you qualify. Pfizer, AbbVie, and others have programs that can bypass step therapy.

Some patients do get lucky. A 2023 GoodRx survey found 17% of people ended up better off on the generic drug. But that’s the exception, not the rule.

The Bigger Picture

Step therapy isn’t going away. Industry analysts predict it will cover 55% of specialty drug prescriptions by 2025. The goal isn’t to eliminate expensive drugs - it’s to delay them. And that delay can be dangerous.

The real issue isn’t generics. Generics are safe, effective, and save money. The problem is forcing patients to suffer through a system designed to save insurers money - not to protect patients.

Until federal law closes the gap for self-insured plans, patients will keep falling through the cracks. And doctors will keep spending 18.3 hours a week just fighting insurance bureaucracy - time they could be spending with patients.

Is There a Better Way?

Yes. Start with the patient’s medical history. Let doctors decide what’s best. Use step therapy only when there’s clear evidence that cheaper drugs work just as well - and even then, make exceptions fast.

Insurance companies aren’t evil. They’re responding to broken systems. But the cost of their cost-cutting is measured in pain, lost time, and worsening disease.

You deserve care that doesn’t require you to fail first.