How the VA and military pharmacy benefits handle generics

On January 1, 2026, the TRICARE copay for a 30-day brand-name formulary drug at a retail network pharmacy rose from $43 to $48. The copay for a generic formulary drug at the same counter stayed at $16. "The cost of generic formulary drugs at retail network pharmacies will stay the same," the Defense Health Agency said when it announced the 2026 rates¹.

At the Department of Veterans Affairs, a veteran who owes medication copays paid $5 in 2026 for a month of a preferred generic, $8 for other generics and $11 for brand-name drugs, according to VA's current rate table⁴. Those amounts stop once a veteran has been charged $700 in a calendar year.

Both federal systems sit outside the commercial insurance market, and each has built its own formulary, tiers and buying rules. Both push hard toward generics, by different routes. This piece lays out how each one works in 2026, using the agencies' own rate tables, regulations and VA's published copay-tier data.

How VA sets medication copays

VA does not charge every enrolled veteran for medicines. Veterans in priority group 1, which includes those with a service-connected disability rated 50 percent or more, pay nothing. Veterans in priority groups 2 through 8 may owe copays for medicines prescribed for conditions that are not service-connected, and for over-the-counter items they get from a VA pharmacy. Copays scale with days of supply.

Source: VA, current health care copay rates, effective January 1, 2026⁴. The $700 annual cap is written into 38 CFR 17.110⁶, which also defines the tiers.

In the regulation's definitions, tier 1 is a generic tier by construction. Tier 2 covers "multi-source" medications not picked for tier 1, meaning a drug approved under the generic or 505(b)(2) pathways that carries an A rating in FDA's Orange Book, along with some biosimilars. Tier 3 is a brand-name or biologic product that "retains its patent protection and exclusivity." Tier 1 is a subset of multi-source drugs that VA picks at least once a year using four tests in section 17.110(b)(2)⁶. VA's acquisition cost must be "less than or equal to $10 for a 30-day supply." The drug must be on the VA National Formulary. It must treat or manage a chronic condition, defined as one that typically lasts three months or more. And it must rank among the 75 most commonly prescribed multi-source drugs that pass those screens. Topical creams, antihistamines, steroid-containing products, musculoskeletal drugs and short-course antibiotics are excluded by rule.

Those tests produce VA's 2026 tier 1 list⁵, which runs to 85 line items in 15 condition groups, from aspirin and allopurinol to tamsulosin and terazosin. It includes many of the drugs in GxRadar's price basket, such as atorvastatin, lisinopril, metformin, sertraline and levothyroxine. Prednisone is not on it, because steroid-containing drugs are excluded, and neither is warfarin, which VA's tier file places in tier 2.

What VA's own data show

VA publishes the tier assignment for every product in its pharmacy system as a downloadable file⁷. GxRadar's analysis of the version posted in November 2026 found 21,878 active product entries. Of those, 463 are tier 1, 7,033 are tier 2, 2,386 are tier 3 and 11,996 are tier 0, the no-copay category. The file lists products at the strength and package level, so one drug can appear many times.

The table compares the VA copay for a 30-day supply of several basket drugs with what retail pharmacies paid to buy 30 tablets or capsules, according to CMS's National Average Drug Acquisition Cost survey¹⁴ for October 2026. NADAC is an acquisition cost at community pharmacies, not a counter price, and VA buys its drugs through its own federal contracts, so the two columns describe different markets.

NADAC for 30 units is the per-unit figure multiplied by 30. The 30-count is a common dispensing quantity and says nothing about how any individual's prescription is written. Drug pages linked above show each price history.

Behind the tiers sits a single formulary. VA's National Formulary page⁸ posted its September 2026 edition, and VA's formulary FAQ⁹ says the original list, published in May 1997, combined more than 170 separate facility formularies. Items are listed by generic name so that regions and facilities can stock whichever version offers the best value, and the FAQ says regional networks cannot add or remove national formulary items. A drug outside the formulary can still be approved through a nonformulary request, for example when a formulary agent has failed or caused an adverse reaction.

Most of those prescriptions arrive by mail. VA's mail order pharmacy page¹⁰ says the department fills about 80 percent of outpatient prescriptions through seven automated mail pharmacies, which processed 119.7 million prescriptions in fiscal 2016, the most recent year it reports.

Federal law also caps what VA pays for some drugs, but generics largely fall outside it. The Veterans Health Care Act of 1992, signed November 4, 1992, created a ceiling of 76 percent of a drug's non-federal average manufacturer price, under 38 U.S.C. 8126¹¹. The statute defines a "covered drug" by reference to Medicaid's categories for single-source and innovator multiple-source drugs, plus biologics, which leaves ordinary generics out of the formula.

How TRICARE prices generics

TRICARE's copays are set in law. The National Defense Authorization Act for Fiscal Year 2018 fixed the schedule, and the current amounts are in effect through December 31, 2027, according to the Defense Health Agency¹. Active duty service members pay nothing. Most other beneficiaries pay by drug category and pharmacy type.

Source: TRICARE pharmacy costs² and the DHA announcement. On the government's own schedule, three 30-day retail generic fills cost $48 in copays, against $14 for one 90-day home delivery fill of the same drug. Our explainer on 90-day supplies covers why plans price it that way.

Two groups sit outside that table. Section 702 of the 2018 law froze copays at 2017 rates for medically retired service members and their families and for survivors of active duty members, so they pay $0 for generics by home delivery and $10 at retail, TRICARE says². And since February 28, 2026, active duty family members enrolled in TRICARE Prime Remote in the US pay no copay for covered drugs at retail or by home delivery, the agency said in a January 2026 notice³. That notice also restates a standing rule: certain maintenance drugs can be filled at a retail network pharmacy twice, and on the third retail fill the beneficiary is responsible for 100 percent of the cost; the notice says those drugs must be refilled through home delivery.

TRICARE writes its generic preference into regulation. Its pharmacy rule at 32 CFR 199.21¹² "generally requires mandatory substitution" of generics carrying an A rating in the Orange Book, with a waiver when there is a clinical justification for the brand. The same rule lets the Defense Department's Pharmacy and Therapeutics Committee charge the generic copay for a brand-name drug when a contract makes the brand the cheapest option for the government. The underlying statute, 10 U.S.C. 1074g¹³, requires a uniform formulary whose contents rest on "the relative clinical and cost effectiveness of the agents" in each class. Our pieces on therapeutic equivalence codes and state generic substitution laws explain what an A rating means.

What to watch

VA must re-identify its tier 1 drugs at least once a year under 38 CFR 17.110, so a 2027 list will replace the one posted in January 2026. TRICARE's current copay schedule runs through December 31, 2027, according to the Defense Health Agency. Questions about which tier or category a specific prescription falls in, or whether a nonformulary or medical-necessity request applies, are for the VA pharmacy, TRICARE's pharmacy program or the prescriber. More on how coverage tiers work is on our tiered formularies explainer and the pharmacy counter desk.