Prescription Drugs: Are Consumers Paying Too Much?
by Erik Folgate
Filed under Consumer News, Insurance, Spending and Saving
The other day I was going through my prescription receipts for the past year in order to get ready for my taxes. I began noticing, in very small print on the receipt, the retail cost of the drug. Since I used several different pharmacies throughout the year, I decided to do a price comparison. I take several maintenance medications, so I was particularly interested in the cost of those.
I compared prices at CVS, RiteAid, Target, Walmart, and Walgreens. What I found was that no pharmacy quoted the lowest price for all of the medications. For example, CVS was $80.00 cheaper than Target for one particular type of medication, dosage and strength but not for other types of medication. I was very interested in these retail price comparisons since with my insurance, I pay 15% of the retail cost. In many cases, it was a small difference, but it varied. The other interesting thing is that none of the pharmacies I compared quoted the same price for the same medication, dosage and strength. I would have never thought that the major chain pharmacies would charge such different prices for the same drugs.
I am definitely not an expert on prescription drug costs, but I am an educated consumer, and with all the healthcare reform pending, I feel obligated to be informed on how I can get the best possible price for my medication. Since we can’t clip coupons for our prescription medication, our only line of defense is to educate ourselves.
Here are a few suggestions for saving money on prescription drugs:
- When the doctor issues you a prescription that you aren’t familiar with, ask if it is an expensive drug. That way he may be able to prescribe a comparable drug that is more affordable. If you don’t have insurance, ask for samples.
- Many group insurance plans have a flat dollar amount for prescriptions and are priced on a tier basis. Every year these amounts keep going up. If your prescription insurance is a flat amount, price comparison probably won’t apply. However, many insurance plans base the co-payment on a percentage basis. If that is the case, then price comparison can benefit your bottom line.
- You are under no obligation to purchase a prescription that has been filled. If it costs more than you are willing to pay, tell that to the pharmacist. They may be able to call the doctor and see if there is another less expensive medication that can be substituted.
- It takes a little effort, but call the pharmacies in the area where you live, and ask for the retail price for the prescribed medication, including the strength and dosage.
- In recent years, the drug companies finally allowed numerous generic prescription medications to be priced at $4.00 for a 30 day supply. Some pharmacies offer a price of $9.00 for a 90 day supply that is dispensed. This has been an enormous benefit for consumers. If you have a Publix supermarket in your area, their pharmacies offer a number of antibiotics that are free of charge when you fill a prescription there.
- Check advertised flyers for incentives a pharmacy may have for a new or transferred prescription.
These are a few of my findings that you might find helpful. A little time and effort is worth it if it translates into big savings on your prescription medications. There is no price to be paid for good health and staying well. The younger you are when you are proactive about your health, the greater the rewards are as you age. We all know that, but have you made that your priority?
This is a guest post from my wonderful mother, Lynn Folgate. She’s a piano teacher, a baby boomer, and she currently lives in Simpsonville, South Carolina. She’s a big fan and supporter of Money Crashers and the information we teach. Her hobbies include quilting, playing the piano, and reading.
(photo credit: ep_jhu)
Great topic! :)
Two points. First, I really doubt your insurance plan is structured that you pay 15% of the retail cost, most likely you pay 15% of the INSURANCE NEGOTIATED cost of the drug. Which means unless the specific drug is on one of these publicized $4-dollar plans, you’ll pay the same price wherever you go. Also, it’s interesting that you give credit for the $4 generic drug plans to the drug companies. The credit clearly goes to Wal-mart, my gut thought is that generic manufacturers had little do with this huge change in the industry.
But again, great topic and definitely consult your pharmacist, this one loves to help you save money. Doctors often have too much on their mind and your co-pay is often not a top priority.
I really loathe the whole American healthcare industry. My MS drugs are about $30K a year (just for one), too specialized for there to be generics available. The drug company usually make an effort to make up for what the patient cant or insurance company wont pay, but drugs should not cost what they do. I know this is besides the point, so take this as a vent. :)
My family is fortunate enough to not have a real need for prescriptions at this time…and at the rare times that we do, it seems like all we need is the awesome $4 30-day pills. Way better than using our insurance!
We are so frustrated with the drug and insurance companies. For years, my wife has been taking Adderral XR and we’ve been paying $60-$75 a month since there was no generic. As we’ve been closer to getting a generic, the price has climbed. One pharmacist speculated that the drug companies were trying to get users to switch to a slightly less expensive option (also owned by Shire Pharmaceuticals), but that was farther away to getting a generic.
The drug she was using was working, so we decided to suffer with the increasing prices in hope of the generic coming out sooner than later and drastically reducing our monthly cost.
The generic finally became available and when we went to pick up the next we were informed that our insurance wouldn’t pay for the generic. What? Why not? Shouldn’t this also save the insurance company money? Makes no sense. For what reason would the insurance company not pay for a generic. They must be making more money with the original still. If we want the generic, it would cost more than the ridiculously high co-pay for the name brand stuff.
Here it’s been several months and the generic is still not available on our insurance plan. What kind of deal does Shire have with Blue Cross Blue Shield that makes it a better financial option for the insurance company to pay for the higher priced drug?
Dave,
Because newly released generics have a period of exclusivity (that is, only one manufacturer is allowed to market the generic drug), its price will be just slightly below the brand name drug. If your insurance drug plan sets generic drug co-pays far below brand-name drug co-pays (for example $10 v. say $75), your insurance company is simply smarter to “not cover” the generic because overall it’s cheaper for them to have you pay the first $75 with the insurance covering the remainder versus you paying just $10, which leaves them with a much larger remainder. To summarize, the insurance companies will use any tactic to lower their payouts. Too bad you can’t yell at them and take your business elsewhere, but that’s employer-based health insurance.
Have you considered non-XR Adderall? Taking it twice daily is probably not much different (except for your wallet) if you take away the placebo-effect of someone telling you XR makes it work “better”.
Thanks for the info Pharmboy. I’ll have to ask my wife if she’s tried that, yet.
Yeah, it never made sense, since the retail price of the name brand usually seemed to be in the $300 – $400 range (I’m just going off of memory, it may have been just below $300) and the generic retail price seemed to be in the $120ish range.
Do you know how long the period of exclusivity is usually?
It’s still bothersome that our co-pay went up as we got closer to the release of the generic brand. Just didn’t make sense until that pharmacist threw out that hypothesis.
I believe it’s 6 mos. but never underestimate the power of some lawyer to file some injuction, etc to delay it and then still prices have to come down through good ol’ competition.
Giant Food also has the free antibiotic prescriptions, up to 14-day I believe. I don’t know how their prices are otherwise.
Consider using Costco for prescriptions. They’re often cheaper, and there is a law that any pharmacy must be open to the public, so you don’t have to be a member.
You can also ask your doctor to prescribe a higher dose of some medications and get a pill splitter at the pharmacist. Slow-release tabs and things where 100% accuracy is necessary don’t work for this, but it can save money.
And if you’re seeing a doctor regularly, ask for samples. They’ll sometimes have them on hand, and my doctor once gave me a 3 month supply of a pricy prescription medication.
When looking for incentives from stores on prescriptions be careful–it is really good practice to have all your medications at one drugstore so that the pharmacist really knows what you are taking. You don’t have to miss out on the offers because some drugstores will honor coupons from other stores. For example, you can try to bring in a Target offer for $10 off on a new prescription to CVS and they will honor it!
Erik,
Your suggestions on savings are very good. Another was to save is that there is also a program called Together Rx Access (free to enroll in) which helps those who don’t have health insurance get their medicines for 25-40% off. I do work for this organization and would like to share that this week the Program released news which has a video on it that provides more info.
See this link: http://www.marketwire.com/press-release/Prescription-Savings-Program-Surpasses-Major-Milestones-Two-Million-Cardholders-100-1121304.htm
Leigh
Ask for generics.
Ask for free samples.
Try to make sure you are not being overperscribed. I get the sneaking suspicion that hapeens with me every time I go to the doctor.
With how high my deductible is, I just consider my health insurance to be “don’t-get-sick insurance”. So I avoid the doctor’s office if at all possible. Normally, you can get some good advice by calling the nurse’s line ahead of time as well. But if I do have to go in, and they recommend some meds, I always ensure that there is a generic equivalent I can pick up.
I’ll have to ask for free sample next time as well…
Believe it or not, the drug manufacture website or the official drug website a lot of times have discount cards/programs to help with the cost of the prescription regardless of whether you have insurance or not. I checked out the Lipitor website and registered for a discount card that I show at my pharmacy that allows me get to a discount or flat rate co-pay on the drug.
Also you can ask your doctor to write a script for a over the counter drug. Prilosec is over the counter, but there is a prescription option and it is more cost effective for my husband to get it with a script.