Did you know that most Americans pay more for prescription drugs than they should? Between paying co-pays for insurance when cash could be cheaper and not using Prescription Discount Cards when paying cash to get the best price, Americans overpay on a regular basis, especially for generics.
Did you know that if you pay cash you’re not getting as good of a price as insurance companies? According to this article: “Price differentials across classes of purchasers of prescription drugs have repeatedly been documented. Most recently, a study by the U.S. Department of Health and Human Services (HHS) calculated the distribution of price differences between those paying cash and those covered by insurance (measured in full transaction price but ignoring rebates from manufacturers).2 One analysis estimated that in 1999 the median price difference between cash payers and third-party payers for the 200 most commonly prescribed drugs was 14.6 percent. This means that for half of the drugs studied, cash payers paid at least 14.6 percent more than third-party payers did. A similar analysis was applied to drugs used most often by Medicare beneficiaries, which showed that cash payers paid higher prices for nineteen of the twenty most frequently prescribed drugs for Medicare recipients in 1999. The HHS analysis is almost certain to understate the price differences because rebates are not included in the price estimates, and, as we discuss below, rebates are a common mechanism used for granting price concessions.”
Here additional findings from another study comparing cash prices versus insurance prices:
- Individuals without drug coverage pay a higher price at the retail pharmacy than the total price paid on behalf of those with drug coverage (based on analysis of MEPS data that do not include rebates but look across all drug purchases holding drug type, form, strength, and quantity constant). The differences generally held up when examining the Medicare and non-Medicare populations.
- Cash customers (including those without coverage and those with indemnity coverage) pay more for a given drug than those with third-party payments at the point of sale (based on IMS Health data for over 90 percent of the most commonly prescribed drugs). In 1999, excluding the effect of rebates, the typical cash customer paid nearly 15 percent more than the customer with third-party coverage. For a quarter of the most common drugs, the price difference between cash and third parties was even higher – over 20 percent. For the most commonly prescribed drugs, the price difference between cash customers and those with third-party coverage grew substantially larger between 1996 and 1999.
- The pattern of differences in the price paid by cash customers and those with third-party payments is different for generic and brand name drugs (based on both MEPS and IMS Health data). Percentage differences in the price paid are often smaller for brand name drugs, but absolute differences may be larger because average prices for brand name drugs are considerably higher.
- Data on manufacturer rebates, if available, would reduce the total amount paid by the insurer or PBM on behalf of insured customers, increasing the difference in the total net price. Data on rebate arrangements, however, are confidential and unavailable to this study. In some instances, the amount of the rebate may be significantly more than the price differences observed at the retail pharmacy level. In other cases, the rebates may add only modestly to the observed differences.
- Various sources produce estimates of rebates ranging from 2 percent to 35 percent of drug sales prices. These rebates are not reflected in retail prices, but are instead paid directly to insurers and other organizations that manage drug benefits after they have already reimbursed the pharmacy.
Want to know how to fight back? Despite this negative news about the plight of the little guy versus the insurance companies, you’d be surprised to hear that there are also many times that paying cash results in LOWER prices than your insurance co-pay. If you use a Prescription Discount Card, you are joining forces with millions of cash payers just like you. In the process, the pharmacies no longer view you as a “single cash payer” but rather as part of a large group whose business they want very badly. Advantage, YOU! Using the Prescription Discount Card is easy. Go to www.discountdrugnetwork.com and you can lookup drug pricing at all of your local pharmacies. Just enter your drug name, dosage, and zip code! The search takes only a few minutes and you might be surprised how much you save. Did you know, many drugs, especially generics, can be purchase for less than your insurance co-pay by using Discount Drug Network’s Prescription Discount Card? Look up pricing for your prescription today!