Here’s How You Can Pay Less For Prescriptions

Americans spend more each year on prescription drugs than people do anywhere else in the world. But paying top dollar for name-brand medicine isn’t the only option these days.

Drug costs are high in the US 

The cost of prescriptions has emerged as a significant health policy concern: when Americans can’t afford the cost of their prescriptions, they sometimes choose to go without. According to a report from the Harvard School of Public Health, one in four patients won’t fill a prescription for themselves or a family member because of the high cost.

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The current White House Administration is actively seeking to end the Affordable Care Act (ACA), which would cause 29.8 million people to lose health insurance. However, President Trump issued an executive order in September 2020 to address the burden of expensive prescription drug costs on Americans. While this targets a supposed cost difference between drugs in the U.S. and other countries, the order may be missing its mark. 

The Commonwealth Fund found that cost differences between drugs in the U.S. and other members of the Organization for Economic Cooperation and Development (OECD) were highly dependent on the drug itself. Additionally, it’s unclear how this order could help those left uninsured if the ACA is successfully repealed. So short of government action, what steps can consumers take to tackle steep prescription costs? 

How to beat the cost of prescription drugs 

Seeing the cost of necessary prescriptions can make some feel like the system is stacked against them. But with the right planning and resources, there are simple steps you can take to start saving on your prescription drug costs. 

Discuss prescription costs with your doctor 

Your doctor can often be your first line of defense against the high cost of prescription drugs. So if you’re worried about costs, start by being open with your doctor. They will likely know of some generic brands for mainstream medications. And while some people might be opposed to an off-brand option, there’s not much difference between the two. Dr. Jessica Nouhavandi, Co-CEO of online pharmacy Honeybee Health, explains, “Brand name and generic medications have the same dose, the same strength, the same route of administration and the same number of pills. The biggest difference is often the price.” And giving up the label can have a major payoff. Honeybee found that those who switch to generic medicines save an average of $237 per year.

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Preparing some information ahead of time can help you take an active role in helping your doctor find a cheaper option with your insurance plan. Ramzi Yacoub, Chief Pharmacy Officer of online prescription savings service SingleCare, suggests, “Bring your formulary to [your] doctor’s appointments. You can often save a significant amount of money when your doctor chooses a medication that has a lower copay.” For those who don’t know, a formulary is the list of drugs that your insurance will cover in part or whole and is specific to your insurance policy. You can usually find your formulary online or through your insurer’s mobile app. 

Check for better deals online 

Online pharmacies offer both convenience and cost savings — a win-win for consumers. A major reason shopping online can be cheaper than your neighborhood pharmacy is that there are no overhead costs. Combine that with options for cash prices and generic brands, and you’re looking at significant savings. There are some scams out there, so make sure you select a reputable online pharmacy for your own safety. Nouhavandi suggests verifying that your online pharmacy is fully licensed and registered with the government by checking a trusted site like the National Association of Boards of Pharmacy (NABP) website safe.pharmacy or LegitScript.

Compare plans during the open enrollment period 

Open enrollment is the one time a year you’re allowed to price shop for insurance coverage. Whether your employer provides your insurance or you’re on a state or private plan, open enrollment is when you can switch to a new insurer, even without a qualifying life event. Compare how much you’re currently paying with other available plans to find the best coverage for you.

[ From Trent: 12 Low-Cost Strategies for Saving on Medical Costs ]

You might also consider not using your plan at all for prescriptions. Depending on the drug in question, the out-of-pocket cost (or cash price) for your prescription could be less expensive than your copay on the very same drug. “Both retail pharmacies and online pharmacies offer [out-of-pocket options],” explains Nouhavandi. “However, out-of-pocket prices are often significantly lower at online pharmacies rather than retail pharmacies.” 

Seek cost-effective plans

For those managing chronic conditions, a larger supply could be the key to savings. Doctors can write prescriptions for these long-term medications for 90-day refills instead of the standard 30-day. For most people, three-month supplies will be cheaper than a monthly refill. “Just make sure your doctor writes a script for [it],” says Nouhavandi. And while getting a refill or shipment every three months is more convenient, it also has positive health effects. Yacoub highlights, “Studies show that filling [prescriptions] three months at a time increase adherence to medications, which can decrease hospital admissions.” 

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In this article

    Mandie Kelleher

    Contributing Writer

    Mandie is a freelance content writer from Boston, MA. Her writing has been featured in Reviews.com, Bankrate and Insurify. She holds a B.A. in Linguistics and French from Boston University.

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    • Andrea Perez
      Andrea Perez
      Personal Finance Editor

      Andrea Perez is an editor at The Simple Dollar specializing in personal finance. Prior to that she specialized in digital marketing content for online learning websites. She holds a master’s degree in journalism and media studies from the University of South Florida.