My son (now 9 years old) was on Nutramagen as a baby. He was on it until he was around 6-7 months old, then gradually switched over to lactose-free formula (Lacto-Free was the name of it). He was on that until 12 months, at which time we were able to gradually switch over to Lactaid milk (lactose-free cow's milk). He was on that milk until age 5. Then we gradually switched him to regular skim milk and he's been fine with that since. Our insurance never covered any of the special formulas or the expensive milk. Sure cost a lot of money for him!
My daughter (now 5 years old) never had a problem with lactose and was able to breastfeed until she weaned herself at 10 months old, at which point she switched to just regular baby formula, then at 12 months to regular cow's milk. (My son breastfed for his first month of life, then switched to the Nutramagen once we figured out that his severe sensitivity to lactose in my diet....even the tiniest amounts....were his problem.) Was amazing how much cheaper my daughter was in that first year!
A helpful hint....when you do try to switch him over (once your pedi OK's it), do it a little at a time. For instance, if you give him 6 ounces in his bottle, make 1 ounce the new formula and the other 5 ounces the Nutramagen. This will not only slowly introduce the lactose back into his diet (easier on his tummy that way), but also will help him adjust to the new taste. In my work as a pediatric nurse, we had many babies reject a new formula based on taste, but with gradually increasing the ratio of the new formula to the old over several days until it was all the new formula, they were much less likely to reject it because they didn't notice the change in taste that way.
Good luck with your sweet son!