Tips for keeping medication costs down
Amanda Greene relies on lidocaine patches to help manage the chronic pain that her Lupus causes.
The anesthetic is available as a generic drug, typically sold at a substantially lower price. But this year, the 47-year-old Culver City resident says she’s seen the patches nearly double in price. Instead of $15 for a 30-day prescription, she now pays closer to $30.
“I asked if the box changed. Did I get more patches? The pharmacist said no,” Greene says.
To save money, she uses the medication sparingly. “When I’m lying here in pain I ask myself: Is it patch-worthy?”
Generic drugs are chemically identical to their brand-name counterparts and just as effective. They usually become available after a brand-name drug loses its patent and generic drug makers enter the market.
These medications have saved our society billions of dollars, says Michael Kleinrock, director of the healthcare research firm IMS Institute for Health Informatics. In fact, according to the Congressional Budget Office, generic drugs save consumers an estimated $8 billion to $10 billion a year at retail pharmacies.
Today, 86% of prescription drugs are generic, according to a recent report by Kleinrock’s organization. What’s more, the average out-of-pocket costs paid by consumers for generics are below $10.
Though the vast majority of Americans are taking low-cost generic medications, Kleinrock says it would be a mistake to assume all generics are inexpensive.
“There are a number of products produced by a small number of companies, and as a result, when faced with market demands the price goes up,” he says. For some patients the effect can be a dramatic change in the cost of their medicine.
The reasons for drug price increases are varied, experts say.
Manufacturing delays and increased demand for a drug are two common causes, and are the likely reason Greene has seen the price of her lidocaine patches double this year. According to the FDA, lidocaine is one of a number of drugs currently in short supply.
Other market forces can also cause prices to surge. For example, once a drug’s patent has expired and it’s manufactured in generic form, the price can become so low that it no longer pays for some manufacturers to continue making it.
“At some point, a drop in price goes too far for some companies to remain in the market,” Kleinrock says. That reduces competition and manufacturers often respond by raising prices.
Perhaps the biggest effect on consumers’ out-of-pocket costs for prescription drugs — whether generic or brand name — is the type of insurance coverage they have.
If the drug you need is no longer covered by your health plan, for example, your costs will soar. In addition, many people are now paying higher out-of-pocket costs for their medical care, including prescription drugs.
Today 20% of those with work-based insurance have a high-deductible plan, meaning they pay the full cost of their healthcare until they reach a certain dollar amount.
According to the IMS Institute report, average deductibles are up more than 150% from five years ago. Today nearly 8 in 10 health plans come with a deductible, more than half of which are $1,000 or more.
Whether you’re on the hook for generic medications or for high-cost specialty drugs, there are ways to save money on prescriptions.
•Shop around. A 2013 report by Consumer Reports found that the cost of the generic version of five commonly prescribed medications, including the blood thinner Plavix and Actos to treat diabetes, varied as much as 447% between the highest and lowest prices for the same medication.
“Most people have no idea prices for the same drug vary, so just looking around is the first step,” says Doug Hirsch, chief executive of GoodRX, a website that tracks drug pricing and helps consumers find the best price.
Hirsch points out that even if your health insurance covers your medication, it’s a mistake to assume your co-pay gives you the lowest price possible. For example, chain stores, such as Target and Walmart, sell $4 generic drugs.
Also be aware that prices vary even within the same pharmacy chain. The same store two miles down the road may sell the medication for less.
•Look for alternatives. “Always ask if there is a generic available,” says Michael Holmes, president of RX Outreach Inc., a Maryland Heights, Mo., mail-order pharmacy that helps people pay for prescription drugs.
A name-brand medication can cost 10 times what generics cost, he says.
•Split pills. Ordering a higher dose of scored pills that can be split in half can yield significant savings.
For example, a search on the GoodRX website shows a 30-day prescription for 20 milligrams of the cholesterol-lowering drug Lipitor costs $17 when purchased at a Southern California Target pharmacy.
The same pharmacy sells a 30-day supply of 40-milligram pills — twice the amount of the first prescription — for $14.68. “And that’s before I split it in half, so that means it’s $7” for the same drug, Hirsch says. “I just went from $17 to $7.”
•Look for drug discount cards. Drug discount cards reduce the cost of medications at pharmacies all across the country. Again, costs vary, and not every card works for every drug.
Discounts can be as high as 80% of a medication’s price, and average about 50%, according to Dr. Richard Sagall, president of NeedyMeds.org, a national nonprofit group that provides information on programs to help people afford their drugs.
Sagall says these cards are a good way to save, but he suggests avoiding any discount card that charges a fee.
Also, discounts shift quickly. “What works this month may not give you the most savings next month,” Sagall says. Generally, you can’t use your insurance coverage and discount cards and coupons; it’s one or the other.
•Watch for financial assistance. NeedyMeds.org has information on thousands of programs; more than 10,000 free, low-cost or sliding-scale clinics; drug manufacturer discount coupons; co-pay programs that help people with insurance pay high out-of-pocket drug costs; and patient assistance programs offered by pharmaceutical companies for those with no insurance.
RXAssist.org also offers a database of pharmaceutical company programs that provide free medications to people who can’t afford to buy their medicine.
Greene, the Culver City resident facing increased drug costs, says she’s worried about prices continuing to rise. “Our drug costs have gone up, but there’s no cost-of-living raise with chronic disease.”
Zamosky is the author of “Healthcare, Insurance, and You: The Savvy Consumer’s Guide.”
