Recently, I was in line at the pharmacy, and a customer in front of me was picking up a prescription. The pharmacist said matter-of-factly, “That'll be $850.” All she could say was, “Really?” She left without a prescription and she told the pharmacist she needed to contact her doctor for a cheaper alternative.
Many of us experience sticker shock over drug costs on a daily basis. And an even more dramatic example suggests that there are no limits. Now let's talk about how to minimize your spending on prescription drugs. How did we get to this point where some drugs cost him more than $1 million per dose? And what changes are needed in the expensive pharmaceutical industrial complex?
7 ways to minimize your spending on prescription drugs
Consider these seven strategies to reduce drug costs. Savings vary based on insurance, donut holes, deductibles, and cost sharing.
- Ask your health care provider three questions: Do you really need all the medicines you're taking? Is it safe to reduce the dose of the medicines you're taking? Substitute with cheaper or generic medicines Can you do it?
- If you have health insurance, check out our list of preferred medications (prescriptions), which tend to cost less than other similar medications.
- Splitting tablets: Your prescription may cost less if each tablet contains more than the required dose and can be split. For example, if you usually take 25 mg tablets, taking half of a 50 mg tablet may save you money on your medication and copays. Ask your pharmacist if the calculations work for you.
- Ask if your out-of-pocket costs will be lower if you get a 90-day supply instead of a 30-day supply.
- Look for prescription drug discount programs that can save you money. Restrictions apply and availability varies by location. Also, payments made through discount programs may not count toward your insurance's deductible or out-of-pocket maximum, so taking advantage of these programs may not necessarily be cheaper.
- Compare prices from different pharmacies and talk to your pharmacist to discuss your options. You may be able to pay less if you don't use insurance.
- Consider using an online mail order service, such as Blink Health or Cost Plus Drug Company. However, spending on these sites may not count toward your insurance deductible. Also, prices are not always cheaper online.
These measures are more effective for some people than others, but they can take a lot of time. Sadly, even if you do all you can, the impact on your wallet may be small.
Why are drug costs so high in America?
My top five candidates are:
Pharmaceutical companies' profit motive. Pharmaceutical companies routinely reject this idea. They say it's expensive to develop new drugs and conduct the clinical trials needed to prove safety and effectiveness. Many promising drugs fail, and the FDA's drug approval process is difficult and expensive.
Furthermore, a recent study JAMA network open Researchers found no relationship between the amount of money pharmaceutical companies spend on drug research and development (R&D) and drug prices. Even after accounting for research and development costs, most of the top 30 drug companies earn billions of dollars in profits. And in Europe, where drug prices are negotiated, prices for identical drugs made by the same companies for the same health problem are typically much lower than in the United States.
Pharmacy Benefits Manager (PBM) We handle drug benefits for major employers, Medicare, and health insurance companies. PBMs negotiate prices with health insurance companies and pharmacies. These help determine which drugs to cover and how much patients will pay. Their fees and incentives account for a high proportion of total drug spending, can drive the approval of more expensive drugs, and contribute to the final costs paid by healthcare consumers. A flurry of state and federal laws aim to limit what PBMs can do and the transparency of their operations.
Cost sharing. In recent years, insurance companies have increasingly shifted costs to patients through increased copays, deductibles, and premiums. This may be justified by the idea that patients will only seek care if they really need it. Of course, it can also discourage people from seeking care, even when warranted.
legitimate operation. Many pharmaceutical companies file numerous patent applications and sue potential competitors to extend the period of exclusivity for certain drugs (see examples). Or, you can tweak an existing drug to create a “me too” drug that you can patent as a new drug. Some drug companies patent old drugs and jack up prices. Some companies have acquired or merged with other pharmaceutical companies to avoid price competition.
Direct-to-consumer advertising. Pharmaceutical companies spend billions of dollars on advertising (approximately $8.1 billion in 2022). Marketing costs drive up drug prices, while increasing demand for heavily promoted new drugs. Advertised drugs tend to be much more expensive (though not necessarily better) than older drugs. Perhaps this is why such advertising is prohibited in most other countries.
What could slow drug price increases?
While prescription drug prices are likely to remain high for some time to come, three developments could help limit drug price increases in the coming years.
conclusion
Let's face reality. Our complex and broken health care system incentivizes those who develop and distribute medicines to set prices far above what most people can afford. And there is a limit to how much you can remove on your own. What we really need is an overhaul that eliminates intermediaries that consistently contribute to increased costs without adding value.
Until we get there, let's do what we can, even if the impact is small. Doing your best to stay healthy may be the most important step you can take. After all, the best way to limit spending on prescription drugs is to have no reason to take them.
