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5 Tips to Help You Save Money on Prescriptions

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You took the time to research and pick the right health care plan for you and your family this year. When it comes to prescription drugs, there are several things to keep in mind that can help you optimize your out of pocket spend within this plan.

How Does Prescription Drug Insurance Work?

Prescription drugs are covered differently depending on your health plan. Traditional health plans generally give you access to prescriptions for a fixed copay. Every carrier has a specific list of medications that defines how a drug is covered. The copay cost is based on the assigned tier of the medication. For example, many generics are usually classified as tier one which corresponds with the lowest copay on your health plan.

Alternatively, if you’re on a High Deductible Health Plan (HDHP), you are generally responsible for the full cost of the drug unless you have already met your deductible. The drug does not cost more in total on a HDHP- but your cost share is greater in exchange for the lower premium you pay for the health plan.

5 Tips to Save You Money on Prescriptions

If you have low copays for prescription drugs, you may not be that motivated to see if they are available for a lower cost elsewhere.  However, if you are part of the growing populace who find yourselves enrolled on a high deductible health plan (30% of all health plan enrollees in 2019), the following tips may help you find significant savings.

Always Ask for Generics

The average price of a brand name medication is now almost 19 times higher than a generic equivalent. Although almost 90% of dispensed medications are generic, it’s important to look at all of your options the next time you’re prescribed a brand name medication. Generic drugs are monitored by the U.S. Food and Drug Administration (FDA) to ensure that they work the same as their brand name equivalent.  They have strict criteria that must be satisfied before a generic drug is approved including:

  1. The active ingredient in the generic medicine is the same as in the brand-name drug
  2. The generic medicine has the same strength, use indications, form (such as a tablet or an injectable), and route of administration (such as oral or topical).
  3. The inactive ingredients of the generic medicine are acceptable.
  4. The generic medicine is manufactured under the same strict standards as the brand-name medicine.
  5. The container in which the medicine will be shipped and sold is appropriate, and the label is the same as the brand-name medicine’s label.

At the end of the day, if you can pay 85% less for a generic drug, why not try it first? Always ask your pharmacist or doctor if a generic medication is available. In many states, prescriptions may be required to be filled as generic unless your doctor specifically requests a brand name drug.

Compare Prices

In the past, we’ve talked about how important it is to shop around for your healthcare when you are able to. Pharmacy is no different. We are fortunate that prescription drug transparency tools have grown in popularity recently and there are now multiple options for the consumer to use to compare drug prices. Below is a list of a few popular websites for consumers to find the best price:

  1. https://www.goodrx.com/
  2. https://www.singlecare.com/
  3. https://www.webmd.com/

Many of the larger retail chains have also come out with their own prescription drug discount programs that are worth checking out as well. It is important to note though that in many cases, by using an independent drug discount program, the prescription will not be run through your insurance. Therefore, that cost is not counting towards your deductible and/or out of pocket maximum. As a result, it’s important to consider your estimated annual costs when weighing your options. If you are a high utilizer, you may be better off avoiding a prescription drug discount program entirely if you expect to hit your deductible in a given plan year.

Use Manufacturer’s Coupons When You Can for Expensive Medications 

In recent years, pharmacy costs have started to outpace other areas of healthcare spending including inpatient hospitalization. The rise in cost is primarily attributable to specialty drug therapeutics which are expensive to develop and target unique conditions within the population.

It is not uncommon nowadays to see specialty drugs that costs thousands of dollars a month. For example, Humira, a popular immunosuppressive drug used to treat several conditions including arthritis, psoriasis, and Crohn’s disease, now costs upwards of $5,000 a month. The cost for this medication has doubled since 2014 and there is currently no generic equivalent available. As a result of high cost trends, most insurance companies require that a member try less expensive medications before moving to the most expensive therapeutic option- this is a routine practice called Step Therapy.  

From a cost perspective, the best way to find any savings for these types of situations is to look at manufacturer’s savings programs. Visit the drug manufacturers website to look for eligibility information or ask your pharmacist if you need help finding out where to go. Don’t forget you can also talk to your doctor about alternatives to try that may be less expensive.

Try Mail Order Pharmacy

Mail order pharmacy is a severely underutilized benefit in the world of prescription drug delivery. The concept behind it is simple- by transferring your prescription to a mail order fulfillment center the cost of a retail brick and mortar pharmacy is cut out of the equation. For traditional health plans that have a first dollar copay for pharmacy benefits, there often is an additional benefit in that you can receive a 3-month supply of a medication for the cost of two copays.  For HDHP’s, the consumer still benefits in that the retail dispensing fee is removed from the member’s cost share.

Historically, every insurance company has had a specific list of mail order facilities that members are required to use to receive medications via mail order. You can login to your insurance company’s website to find out who they use and sign up for mail order delivery services. We predict substantial developments will be coming in this area as tech giants like Amazon have moved into the drug fulfillment space. Keep an eye on this area for 2020 and beyond as we move into a new era of mail order pharmacy.  

Keep Your Eyes Open for International Sourcing Options

Chances are, you read this last heading twice to make sure you got that right.  If your employer is self insured, it is possible that today they offer you the option of obtaining certain high-cost, specialty or brand prescriptions by importing the prescription from Tier 1 countries such as New Zealand and Australia.  There are hundreds of examples where many of the exact same prescriptions are available at a fraction of the cost, even after mailing them overseas, due to the way the pharmaceutical industry operates uniquely in the United States.

Finding Drug Savings

Whether it’s realizing that your prescription is cheaper at Costco or that you can get it more conveniently and affordably through the mail, there are generally good options to saving money on prescription drugs.  What’s more, prescription drug prices are not static and it’s worth checking at least once per year if there are alternate sources to having your prescriptions filled or if new discount programs are available from the manufacturer.  So, if you haven’t downloaded your insurance carrier’s app and GoodRx yet, why don’t you do so now and possibly find some savings to put toward your specialty coffee splurges!

About the Author

Becky McClellan has a B.A. in Economics and is currently working toward a master’s degree in Applied Statistics at Rochester Institute of Technology.  Becky is a Health Analytics Consultant who has worked in employee benefits since 2012.  At Consiliarium Group, Becky works closely with clients to create sustainable, long-term health care initiatives and organizational strategy as it pertains to their benefit programs. Her role includes the analysis of funding arrangements, development of contribution strategy, and analysis of claims utilization to identify strategic opportunities. Becky is passionate about creating a multi-year plan for organizations to drive employee engagement, consumerism, and cost transparency surrounding health care.

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