OBJECTIVE: Evaluate the impact of 3-tier pharmacy benefit structures on medication switching patterns. METHODS: The study design was a "pre"-test/"post"-test quasi-experimental design with comparison groups using chronic disease sufferers from a health plan in the Western US. Individuals with 2 prescriptions for a non formulary medication (n=1729) were classified by their pharmacy benefit group as: a) 2-tier moving to a 3-tier structure, ("converting" group); b) 2-tier staying in a 2-tier structure; and c) 3-tier staying in a 3-tier structure. The latter two were "comparison" groups. Two time periods were studies: the "pre" period before and the "post" period, after a change in pharmacy benefit structure. Cox regressions, adjusting for age, gender, chronic disease scores and pharmacy plan structure, assessed differences in the continuation rates of non formulary medications across all groups. RESULTS: Over 60% switched to formulary alternatives when faced with increased co-payments, of which 43.3% switched to a brand alternative (p<0.001). Less than 10% discontinued their medication. Cumulative continuation rate was higher for the converting group: 30.1% (95% CI 27.6%-34.1%) and similar for members in the two-tier comparison group: 26% (95% CI 21.2%-32.6%). Three-tier comparison group members were half as likely to continue their non formulary medications during the post period: 17.1% (95% CI 14.3%-20.4%). CONCLUSIONS: Individuals confronted with increased co-payments due to the implementation of a three-tier plan often switched their medications to formulary alternatives. While this finding supports the general purpose of three-tier structures, of concern is the potential impact on individuals who discontinued their medications due to these changes.