Save on Prescription Drugs: How to Pay Less Than Your Insurance Copay
Last updated October 13, 2020
I’ve found a simple way to cut the cost of my family’s prescription drugs. For certain refills, we skip the insurance, download a coupon from the website GoodRX.com, and pay with cash.
I know, it sounds crazy, but by doing this we’re saving nearly $1,000 a year. Just look at these prices:
- One of my drugs has a copayment of $122 for a 90-day supply. With the GoodRX coupon, I pay only $12. To use the coupon, I needed to transfer that prescription to another pharmacy near my house. But to save $440 annually, it’s worth that extra shopping trip four times a year.
- My wife takes two drugs, each with a $144 copay. With the GoodRX coupon, they’re only $12 each. Her yearly savings: $528, and she didn’t have to switch drugstores.
What’s going on here? Why am I paying for health insurance and getting significantly lower prices for medicines by not using it?
“Unfortunately, the magical world of prescription drug prices is very much a black box, so it's very difficult to say exactly what's happening,” said Leigh Purvis, director of healthcare costs and access at AARP. “A lot of different things are involved in how insurers set their cost-sharing, and we’re finding that a lot of times you may have a higher copay for your share of the price of that drug than you would if you’d shopped independently.”
When it comes to health insurance, prescription drug pricing is a moving target. Insurance companies typically change their formulary—which drugs are covered and at what copay levels—each autumn just before open enrollment. But it can happen at any time with little notice.
A drug you take on a regular basis can be moved to a different tier that has a higher copay or it can be dropped altogether by your insurance company. You also pay more out of pocket for your meds until you meet any annual deductible.
Your insurance company hires a third-party administrator called a pharmacy benefit manager (PBM) to set its formulary. After negotiating prices with the drug companies, the PBM decides which drugs will cost more, which will cost less, and which won’t be covered at all.
In many cases, pharmaceutical companies pay the PBM to favor some of their drugs in that formulary by putting them in a lower-priced tier (smaller copay for the consumer) to boost sales, according to Lisa Gill, investigative reporter for health and medicine at Consumer Reports.
“It’s legal, even though consumers will not see the benefit of these so-called ‘rebate’ payments,” Gill told Checkbook. “As this money moves between drug companies and pharmacy benefit managers, what bubbles forth is a formulary that can be very irrational to the consumer. It’s not transparent, and you only feel the pain of this price system as you go to fill the prescription.”
That explains why you might have a $20 copay on a cheap generic drug that would cost you $10 if you paid without using insurance.
“And that scenario can happen because there’s a competing drug—a branded version or extended-release version––that the PBM would rather you take, as opposed to the cheap generic,” Gill said. “Intuitively, that doesn’t make sense to you, but it makes economic sense to the PBM that’s getting rebate money to favor that higher-priced drug.”
High Prices Have Serious Health Consequences
Shifting more of the cost of prescription drugs to the patient—through higher copays and higher deductibles—is one of the major reasons why drugs are taking a bigger bite of the family budget.
- 29 percent don’t take their medicines as prescribed.
- 19 percent don’t fill prescriptions.
- 18 percent take over-the counter drugs instead of what their doctors prescribed.
- 12 percent cut pills in half or skip doses.
“Individuals who report difficulty affording their prescription drug costs are more likely than their counterparts to report not taking their medicines as prescribed due to cost (58 percent vs. 17 percent),” the report noted. “Among this group, one-quarter (27 percent) say their condition got worse as a result of skimping on medications because of the cost.”
Ignoring a drug regimen can have serious consequences. For example, taking less than a therapeutic dose of a cholesterol-lowering statin could result in a heart attack down the road.
How Online Discount Coupons Work
It’s easy to compare discounts offered by these websites for prescriptions filled by pharmacies in your area. Just visit a discount program’s website, enter your Zip code, the name of the drug, the dosage, and the quantity. You’ll get a list of nearby pharmacies that accept that online discount coupon and the prices for each store. You may also see prices for mail order and home delivery services.
For example, we searched SingleCare for a 30-day supply of Atorvastatin Calcium 40mg tablets, (the generic version of the widely prescribed cholesterol-lowering drug Lipitor), and were offered the following coupon prices for in the Chicago area (Zip code 60007):
- Walmart: $15
- Jewel-Osco: $16.56
- Mariano’s: $ 16.56
- Meijer: $ 16.56
- CVS: $50.81
- Walgreens: $62.09
To get the discount, just print the coupon or text or email it to yourself and take it to the store. With some coupon sites, you simply present your membership card.
Depending on the drug and where you live, you can typically pay 50 to 80 percent less than the full cash price, which may be cheaper than what you’d pay with insurance.
Note: These coupons are also a money-saving option for those with no health insurance. Many also offer discount coupons for over-the-counter (nonprescription) medications.
You may be able to use these online coupons to save money on medications for your pets, if there’s a human equivalent and dosage available. Talk to your vet.
How Do They Do It?
These coupon companies are paid commissions from the pharmacies that get their referrals.
There’s generally no membership fee.
Consumer Reports recommends checking at least one coupon site to see if it can save you money.
“You might very well be surprised,” said Consumer Reports’ Gill. “These companies offer hundreds, if not thousands of coupons and discounts, and particularly on generic drugs. You'll see the greatest savings on generic vs. brand-name drugs.”
No matter where you shop, Consumer Reports recommends asking your pharmacist: “What is the lowest possible price you can give me and is there a cheaper price if I don’t use my insurance?”
“That question was unthinkable 10 years go,” Gill said, “but it’s become important now that insurance companies are covering less and less.”
What’s more, Gill says be sure to ask independent, mom-and-pop pharmacies if they will negotiate lower prices with you, since they have greater leeway over what they can charge.
Check Privacy Policies
Some of the discount services don't require that you provide any personal information. For example, at GoodRX you can print coupons or use its app without supplying any info about yourself. On the other hand, WellRX requires you to provide your full name, email address, date of birth, and Zip code to use its savings card.
If you use a coupon from these websites, you won’t be able to use your health insurance (whether private or Medicare), so the purchase does not count toward your annual deductible.
But if you don’t anticipate meeting your deductible for the year, coupons can be a good choice. If you do expect to meet it, then consider using insurance and paying the higher price.
Safety is something else to consider. Pharmacies have safeguards in place to help prevent harmful drug interactions. If you need to shop at more than one pharmacy to use the coupons, you’re going around those safeguards, so it’s important to make sure your doctor and your primary pharmacy have a list of all the drugs you take.
Other Ways to Save
Using coupons isn’t the only way to save. Other options include:
Mail order: To encourage online shopping, insurance companies typically have better prices for ordering your drugs online.
Buy a bigger amount: If you’ll be on a drug for more than three months, ask your doctor if you can get a prescription for a 90-day supply. Chances are you’ll pay significant less than with a 30-day refill.
Shop around: Don’t assume every pharmacy has the same price for the same drugs. It can vary greatly. Consumer Reports found “remarkable” price differences when they shopped a market basket of five popular generic drugs a few years ago. Total price for those five drugs ranged from $66 to $928 for a one-month supply.
Ask for free samples: If you’re prescribed a new drug during an in-person visit, and money is tight, ask the doctor if there are any free samples available.
Some pharmacies offer free drugs: Some supermarket chains offer certain medications for free.
Shop warehouse stores: You can find great prices at Costco and Sam’s Club—and you don’t need to be a member to shop at the pharmacy.
Look at patient assistance programs: Some pharmaceutical companies have programs to help lower prescription drug prices. Check the industry’s PhRMA’s Medicine Assistance Tool, or visit the Medicare website if you’re enrolled in Medicare prescription drug coverage (Part D). The nonprofit NeedyMeds.org can help you find discount programs offered by drug manufacturers.
Visit a charitable clinic: There are now more than 1,200 non-profit clinics across the U.S. that provide low-cost of free medical care, including drugs, for those in need. (You may have to provide details about income or insurance status.) Check the website for the National Association of Free & Charitable Clinics to find a clinic near you.
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for KOMO radio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.