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HOW DO PRESCRIPTION DISCOUNT PROGRAMS WORK?

Sep, 26 2017

Has your family been hit with the increasing cost of medications? Many of us are impacted by prescription prices. According to the Centers for Disease Control, about 47% of Americans have used a prescription drug in the last 30 days, 21% have used three and 10% have used five or more drugs. That’s a lot of medicating!

While there are many ways to save, some are turning to Prescription Discount programs.

For over 6 years, I have personally used this type of savings program and have heard stories from many others who have also saved with a Prescription Discount program.

I’m sharing 4 things I’ve learned…

1. Who are they good for?

Prescription Discount program might be good for your family if you have prescription(s):

a) that are expensive and only partially covered by your insurance

b) that aren’t covered by your insurance

c) but don’t have insurance.

You can’t “double dip” and use insurance AND a Prescription Discount program – it’s one or the other. Sometimes your insurance will be a better price, but sometimes a discount program might have the better price. It’s always a good idea to tote your insurance info AND discount program info. Then, you can look up pricing beforehand or ask the pharmacist to determine which provides the better price. 

2. Why do they work?

There are companies called Pharmacy Benefit Managers (PBM) that negotiate drug pricing FROM each pharmaceutical company FOR each pharmacy.

Pharmaceutical company  →    PBM   →    Pharmacy

In other words, PBMs negotiate pricing on every drug at every pharmacy, so there are different prices EVERYWHERE. As is good business practice, pharmacies negotiate prices depending on their customer base. For instance, Pharmacy A might have a lot of soccer mom customers, so they charge less for Amoxicillin to get moms in their door, but charge a lot for heart medication to re-coup the sales they lose on Amoxicillin. And, Pharmacy B might have a lot of retired/elderly customers, so they charge more for Amoxicillin and less for heart medication. 

All of this fluctuation makes it hard for a normal American to be a good consumer and find the best price. Most of us just pay the price negotiated by our insurance, which may or may not be the best price available. A Prescription Discount program can give another option and provide a little more “behind the scenes” transparency.

Prescription Discount Programs

3. When do they work best?

If you have insurance, some plans over a low $5 co-pay on a range of common drugs. In this case, just pay the $5 and be happy :-)

Some drugs - maybe about a third - have pricing that’s set by the pharmaceutical company and there’s NO fluctuation between locations. Most Prescription Savings programs have a price look up system, so you can tell if your drug will have a discount by looking up your drug at all local participating pharmacies. You’ll know your drug falls into this category if the price is exactly the same at all stores. Sorry! :-(

On many drugs, not only is there a big discount from the retail price, but there can be a LOT of fluctuation in price between stores. As I said earlier, if a drug is lower in one store, it probably means another drug is more expensive there than at other stores. In reviewing medications in a price look up system, I’ve seen them fluctuate from $4 at a pharmacy on one corner to $150 just down the street.  

4. What should I watch out for?

Not all Prescription Discount programs are created equal, so beware!

  • There are some that give weak discounts and at very few locations, so ask for this information before you sign up for a paid program.
  • Some programs advertise a broad savings range that sounds good, but you want to know what their AVERAGE discount is. For instance, “Save 10 – 85% on your prescriptions!” sounds promising. But if the average savings is only 18%, that’s misleading. Look for a broad range and a 35% or more average discount.
  • Look for a program that allows you to look up your prescription at local pharmacies BEFORE you become a member. Then you’ll know whether or not the program will help on your drug.
  • Look for programs that offer thousands of locations and verify that there are plenty in your neighborhood.

Now it’s your turn! Are you dealing with higher prescription costs? Have you tried a Prescription Discount program? Comment below or email me at heidi@freshbenies.com!

 

Heidi

Heidi has a passion for helping busy families control their healthcare dime, time and peace of mind! She writes articles to do just that, while keeping it fun and simple for her readers! She also speaks on healthcare issues and is the owner of www.freshbenies.com.

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