Updated: May 28, 2020
Written by Adam King
You walk into the pharmacy, plunk down your insurance card thinking you just got the best possible price for you and your insurance on your generic medications, right? Well not so fast! If you want to really save money on your prescription, where you fill your prescription is just as important as which medication you take.
Let’s consider the cholesterol drug atorvastatin which is better known as Lipitor®. These prices were actually paid by members of the same prescription drug plan for a 90-day supply.
If the first thing that strikes you is that the chain retail stores charged the highest price, then you are very observant. When it comes to negotiating with insurance companies chain pharmacies with thousands of stores have the highest negotiating power with insurance companies. They can often dictate what the insurance company reimburses them which explains the higher cost.
The second thing you will notice is that member 1 got the best deal which is free. The advantage here is that the member did receive the medication at no cost to themselves and the employer. The store in this case is using this medication as a “loss leader”, or a method to get you to the store hoping you will purchase other items. While free is a great price, just remember the retailer is hoping you’ll reward their “generosity” by spending money with them elsewhere. These pharmacies will also often have higher charges for other medications you might fill.
If you want to save money without strings attached independent pharmacies, regional grocery chains, and hospital outpatient clinics do not share the same negotiating power of the large chains. Instead the insurance company can often dictate the maximum allowed price the pharmacy can charge the patient. This is how they claim to save health plans money, and in truth they are half right. If you use one of these pharmacies, ask them if it might be possible to get a lower cost on your medication by paying out of pocket rather than billing insurance for some of your medications. You’d be surprised how many insurance companies charge abnormally high rates for low cost generics. While most people think HIPAA is a privacy law, its regulations are also put in place that give you the right not to bill your insurance.
Member 6 got upset by the higher cost he was paying at a larger chain pharmacy and decided to do some price shopping and discovered that one of the big box warehouse club pharmacies had a discounted “cash” price of $20 for his medication. Cash pricing refers to prices charged by providers without billing the prescription or service to the insurance company. So rather than bill their insurance, member 6 paid out of pocket to save money. While member 6 got a good deal on that medication, member 6 did not get the best deal.
There is one cautionary warning on member 6’s tactic. Member 6 should now get all their medications at that pharmacy to avoid a potentially dangerous drug interaction as there is no central database that tracks every medication that is filled unless those medications are filled by a pharmacy and billed to an insurance plan.
Member 7 used a discount mail order pharmacy to fill their prescription again by doing some price shopping. Online mail order pharmacies are convenient and often inexpensive just make sure you order your medication early to allow for the delivery time. Be aware that if the pharmacy advertises drugs from Canada, that they may be sourcing those medications from third world countries that have very lax pharmaceutical regulations. What you think may be your cholesterol medication may very well just be a sugar pill.
If you choose to have an online discount pharmacy fill your medication, make sure that you get a good deal on all your medications. Also verify that the pharmacy is registered with your state board of pharmacy which oversees that the pharmacy is following state and federal regulations related to pharmacy practice and drug sourcing. The website should also be registered with the Verified Pharmacy Program offered by the National Association of Boards of Pharmacy. Again, this pharmacy will not bill your insurance, so you should make sure that the pharmacy is aware of all the medications you take and that there is a pharmacist available to answer questions about your medication.
Last, it pays to have a patient advocate that is aware of all the tactics companies use to maximize their profits at your expense. Health Plan Advocate offers a certified and licensed pharmacy technician that will help you, your company, and your colleagues save money. If your employer does not offer this benefit, ask your human resource department to contact us about this valuable service.