If you haven’t experienced it yourself, you’ve no doubt heard about the outrageous — and rapidly growing — prices of certain prescription medications.
The average price of about one year of cancer-drug therapy has skyrocketed from $10,000 (or less) before 2000 to more than $100,000 by 2012, according to a recent Mayo Clinic study.
The new hepatitis C drug Sovaldi comes at a retail price tag of $84,000 for a 12-week course.
Prices are even spiking for some generics that have been around for years. Take the cost of the commonly used antibiotic, doxycycline, which jumped from $20 for 500 pills in Oct. 2013 to $1,849 in April 2014, according to AARP.
The unaffordability of drugs is a real and growing threat, even for people with health insurance.
Today I’m going to offer some tips on how to save money on your prescription drugs, whether you’re insured or not.
Q: I was recently diagnosed with cancer and had my first round of chemo. The nurse gave me a prescription for a generic anti-nausea medication. When my wife took it to the drug store, she was quoted a price of $900 for a 30-day supply. How is that possible?
A: I wish I could answer the question from Jim Buchanan of Hemet, but I don’t know why a generic anti-nausea drug would cost $900 out of pocket, even with his insurance applied to the prescription.
I can say that his wife, Susan Buchanan, did the right thing when she didn’t take $900 for an answer. Though “totally in shock” from the quoted price, she asked what the cost of the prescription would be without applying insurance.
Counterintuitive? Yes. Confusing? Definitely.
“In some cases, people may be better off not using their insurance,” says Betsy Imholz, special projects director at Consumers Union.
Lesson 1: Shop smart.
When you get your prescription, call multiple pharmacies and negotiate, even for generics. Neighborhood pharmacies may have more autonomy to lower prices than chain stores, Imholz says.
If you don’t have insurance, however, Costco has the lowest price of chain stores on average, she says. You don’t have to be a member to use its pharmacy.
Finally, ask your doctor to write a prescription for a 90-day supply of drugs instead of 30 days. “You’ll be avoiding copays and trips to the pharmacy,” she says.
Lesson 2: Appeal for coverage.
Let’s say your doctor wants you to take a medication that’s not on your plan’s formulary and you’re faced with paying full cost.
Before you empty your pockets, file an appeal with your insurer, which in most cases must cover medically necessary drugs that aren’t on their formularies— if your condition warrants their use.
If your health plan rejects your appeal, contact your regulator and request an independent medical review, which is free. The health plan’s denial letter will specify your regulator, or try the state Department of Managed Health Care (888-466-2219 or www.HealthHelp.ca.gov) or the state Department of Insurance (800-927-4357 or www.Insurance.ca.gov).
You’ll need to work with your doctor through this process to help you prove medical necessity.
Lesson 3: Look for financial assistance.
There are a slew of programs offered by drug companies and foundations, and many websites that help you search for them. One is NeedyMeds (www.NeedyMeds.org), a national nonprofit that helps connect people with assistance.
“Pharmaceutical companies give away billions of dollars in drugs every year to people in need,” says NeedyMeds President Richard Sagall.
Financial help from pharmaceutical companies is generally for brand-name drugs that don’t have generic equivalents. These programs have eligibility requirements based on four categories, Sagall says:
If you have drug coverage but can’t afford your copay, there are programs that may help with that, too.
Other helpful websites for financial assistance include the Partnership for Prescription Assistance (www.pparx.org); Patient Services, Inc. (www.PatientServicesInc.org); and the Patient Advocate Foundation’s National Financial Resource Directory (www.PatientAdvocate.org).
You can also reach out to disease-based organizations like the Leukemia & Lymphoma Society or the American Diabetes Association.
Lesson 4: Use prescription discount cards and programs.
There are two types of drug discount cards. The first comes from pharmaceutical companies and generally offers discounts for a specific drug, Sagall says.
The other discounts multiple drugs and is offered by AARP, Costco, NeedyMeds and others. However, “you cannot use these in conjunction with insurance or state-federal programs such as Medicare,” he says.
But don’t forget the Buchanans of Hemet, who got a better deal without their insurance.
Lesson 5: Choose insurance with drug coverage you need.
One of the best ways to limit your out-of-pocket costs is to choose the best plan for your situation. You’ll have a chance to do that in your next open-enrollment period, which is fast approaching for most people.
If you have a chronic condition or take a lot of medications, try to avoid high-deductible plans, which include the “bronze” level plans sold by Covered California.
“If you have to pay a little higher premium but have lower out-of-pocket costs, that’s a better choice,” says Liz Helms, president/CEO of the California Chronic Care Coalition.
Whether you get your health insurance from your employer, Covered California or the open market, more of you are picking — or being forced into — high-deductible plans.
Although these plans come with relatively cheap premiums, you must spend thousands of dollars out of pocket before your coverage kicks in.
The price tag for the same medical procedure can vary from provider to provider, sometimes by thousands of dollars. If you want to be a savvy consumer who shops around, it is very difficult, if not impossible, for people to know with any precision what prices will be in advance.
Q: I have lower back pain and my doctor ordered an MRI. My health insurance has a $6,500 deductible. Should I go to the imaging center my doctor recommended or search for a better price elsewhere?
A: A survey by Castlight Health last year found that the price of a lower back MRI ranges from $589 to $3,076 in San Diego, depending on the provider. In Fresno, it costs between $636 and $921.
The potential for savings is great. But whether you should shop around depends on several factors.
Some health plans lend themselves to price-shopping more than others. You may have more flexibility if you have a PPO (Preferred Provider Organization) instead of an HMO (Health Maintenance Organization). I’ll explain below.
Second, price-shopping isn’t for medical emergencies. It’s most appropriate if you need what Jeanne Pinder calls a “discretionary procedure” that allows you choice in providers and time to research.
Pinder is a former New York Times journalist who started ClearHealthCosts.com in 2011 when she realized that people were being told to be active healthcare consumers without having the tools – or reliable price data – to do so.
She warns consumers not to assume that high prices equate to better quality. “Study after study has shown that price and quality are not linked,” she says.
In California, ClearHealthCosts has partnered with NPR radio stations in Los Angeles and San Francisco to create PriceCheck sites where consumers can report – and search – costs for several common procedures, including mammograms and colonoscopies.
Before you start shopping, ask your doctor for the exact name of your treatment and the accompanying procedure codes. There may be more than one, and you’ll need them all for an accurate estimate.
Once you have that information, dive in:
And remember, this isn’t foolproof. You may come across conflicting information in your search or contend with providers who won’t tell you the exact cost of a procedure.