Prescription Drug Costs and Savings - GoodRx (2024)

Overview

Prescription medication is a cornerstone of U.S. healthcare. People rely on their doses to help them stay functional and prevent or fight medical conditions. About 6 in 10 adults take at least 1 prescription drug, and 1 in 4 say they take 4 or more medications, according to the Kaiser Family Foundation (KFF).

Medication can take many forms, including:

• Pills or tablets

• Capsules or caplets

• Oral suspensions

• Injections or infusions

• Inhalers

• Creams, ointments, or lotions

• Transdermal patches

Affording medication is especially hard for those who:

• Take four or more medications

• Have chronic conditions

• Have annual household income less than $40,000

GoodRx Research found that prescription drug prices rose 35% since 2014..That can make adults less likely to stick with their medications, endangering their health.

Americans know the high prices of brand-name drugs better than anyone else. But there are ways to save on medication while lawmakers try to agree on how to lower prescription drug costs.

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Drug costs and coverage

Prescription drugs are one of 10 essential health benefits that most health insurers must cover under the Affordable Care Act.

The list of drugs your health plan covers is called a formulary. Each year, formularies typically change. Drugs that are covered one year may drop the next year. New ones may join. That’s why it’s important to compare plans during open enrollment.

Health plans often have multiple tiers, or levels, of prescription drug coverage. Generally, the lower the tier, the lower the cost. What you pay out of pocket depends on:

• The drug

• The tier it’s on

• The pharmacy you choose (and whether it’s in or out of your plan’s network)

Medicare added a prescription drug benefit for the first time in 2003, and Part D private drug plans launched in 2006. Part D covers outpatient drugs that you pick up at a pharmacy. It has 4 phases of coverage.

Medicare Part A covers the drugs you get at a hospital or inpatient facility. Part B covers certain office-based drugs such as infusions.

Medication access

Health plans often control costs by limiting medication access. Examples include:

Prior authorization: This is when you need to get the plan’s consent before your prescription is covered.

Step therapy: Your plan may require you to try a less expensive drug before a more expensive one.

Quantity limits: Your plan may limit how much of a medication you can have filled at a time.

Separate deductible: You may have to pay a certain dollar amount upfront before your insurance begins paying claims. GoodRx Research has found that 44% of commercial health plans had a separate pharmacy deductible.

Those who are uninsured or underinsured may find low-cost medication at community health centers through the 340B Drug Discount Program.

Federal, state, or local governments make some drugs such as COVID-19 pills and Narcan free to the public. Others like birth control are supposed to be free when you see a healthcare provider in your plan’s network, but you may need to advocate for your rights.

Generics and biosimilars

It pays to choose a generic drug instead of a brand drug when possible. Generic drugs are 80% to 85% cheaper and just as effective in most cases.

If you can’t get a generic, it may be because the drugmaker still holds the patent for a number of years. That prevents others from copying the original and reducing the price.

Biologic drugs are made from living organisms and may have “generic” versions called biosimilars. A biosimilar is very similar to another FDA-approved biologic, called its reference product. GoodRx Research found biosimilars are 10% to 37% cheaper than biologics.

Humira is a widely used biologic that has a growing list of biosimilars that will begin to launch in 2023. So far, a pharmacist may be able to automatically substitute only one: Cyltezo. The rest of Humira’s biosimilars need pharmacists to jump through a hoop of having a healthcare provider authorize a switch first. That makes Cyltezo the only interchangeable biosimilar for Humira, which provides flexibility.

Insulin and diabetes drugs

Depending what type of diabetes you have and how advanced it is, you may need insulin to control your blood sugar. If you have Type 1 diabetes, you need it to survive.

Insulin helps keep blood sugar levels under control, which can prevent serious complications. But its cost has tripled in the last 10 years, forcing many people with diabetes to ration insulin.In 2021, Medicare debuted enhanced prescription drug plans that cap the out-of-pocket cost of a set of insulins at $35 for a month’s supply.Such plans should save beneficiaries an average $446 a year, according to the Centers for Medicare & Medicaid Services. The program will run through 2025.

At least 19 states also have caps on monthly copayments for insulin. In 2021, Semglee launched as the first interchangeable biosimilar insulin.

You may find lower-cost private-label insulin at stores like Walmart.

If you have Type 2 diabetes, you may control your blood sugar with metformin or other oral medications and lifestyle changes.

Drug delivery and discounts

Getting a break on brand-name drug costs can involve the companies that make them.

Pharmaceutical companies most often sponsor patient assistance programs (PAPs), which offer free or low-cost medication to those who qualify. You may be eligible for a PAP if you’re uninsured or underinsured. Nonprofit PAPs such as Get Insulin may have different eligibility criteria.

Copay savings programs help people afford both brand-name and generic medications. You don’t always have to have insurance, either.

Manufacturer copay cards typically help those with commercial insurance afford their medication. People with Medicare or Medicaid aren’t eligible.

Other ways to save include:

• Ask your healthcare provider to write a prescription for a 90-day supply of maintenance medication instead of a 30-day supply. You can save on dispensing fees, not to mention trips to the pharmacy.

• Use a mail-order pharmacy.

• Use a discount card or GoodRx. The price you get can sometimes beat your copay, if you have insurance.

Expensive drugs

For some drugs, expensive is an understatement. If you have a rare disease, you may need an orphan drug. Even if few pay the list price, coverage restrictions can be severe.

Knowing how to use your health insurer’s appeal process or applying for a clinical trial is crucial. Medicare has its own appeal process.

Gene therapy often comes at a high price. That’s the case for Zolgensma for young children with a rare genetic condition called spinal muscular atrophy. At a price of $2.1 million for a one-time treatment, it is the most expensive medication in the U.S.

But Alzheimer’s drug Aduhelm was expensive without providing a clear benefit. So, the manufacturer cut the price nearly in half, to $26,200 a year, as it was trying to earn Medicare coverage for the drug.

Medicare Supplement Insurance covers out-of-pocket costs for Parts A and B, not Part D. But if you qualify for Extra Help, you can get financial support for Part D monthly premiums and out-of-pocket costs worth about $5,100 a year.

Common concerns