Spending

Prescription Drugs May Cost $1,200 a Year, but You Can Cut That by Up to 85%

Sam Becker

Welcome to Day 24 of our 30-Day Easy Money Makeover! Every day in April, we’re bringing you strategies to help you improve, and feel more confident about, your money situation. Follow along and see the rest of the calendar here.

If you have an ongoing health condition, the costs of prescription medication can represent a substantial—and growing—part of your budget.

For example, the price of insulin, which is used by diabetes patients, doubled between 2012 and 2016 to an average $666 per prescription. Cash prices for asthma inhalers rose 35% from 2013 to 2018, to $380. All told, the average American shells out $1,200 every year for prescription meds.

Why have prices jumped? Often, drug companies can charge U.S. customers as much as they want—for some brand-name drugs, Americans pay up to five times more than someone in the European Union, says David Mitchell, founder of the advocacy group Patients for Affordable Drugs. Monopolies, market exclusivity, and control over patents can also make it tough for competing drugs to enter the marketplace, he says. On the insurance side, not every health plan covers every prescription or treats it the same way.

Lawmakers on both sides of the aisle have put forth bills on drug pricing that could cut your costs, but right now, the burden is on consumers to look for ways to rein in that expense.

One of the most important things you can do is be transparent with your doctor that cost is an issue, says physician Davis Liu, chief clinical officer at telemedicine provider Lemonaid Health. He’s also the author of "The Thrifty Patient: Vital Insider Tips for Saving Money and Staying Healthy.” That could be a difference-maker in the drug selected or your course of treatment.

"If you're really worried about cost, you really need to push your doctor before you leave the office,” he says.

Here are some other strategies to save money on prescriptions:

1. Buy generic

According to the FDA, generic drugs can cost up to 85% less than their name-brand counterparts. That is, assuming a generic is on the market—and there may not be. Talk to your doctor about those options.

Pharmacies at big box stores, such as Walmart or Costco, often have great deals on generics, Liu says. "Walmart has $4 prescriptions for a 30-day supply,” he says, citing the retailer’s list of available generic drugs.

2. Ask for discounts

Some drug manufacturers offer discounts or rebates as an incentive for both retailers and consumers to purchase their drugs. For example, prescription prenatal vitamin brand CitraNatal offers a savings card that offers up to $50 off per month, pushing prices as low as $20. Before you visit the pharmacy, check the drug manufacturer’s site to see if there are any discounts or rebates, or a patient assistance program.

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3. Use price-comparison tools

Take advantage of prescription price-matching sites and apps that can help you find coupons and other discounts to dramatically drop your out-of-pocket expenses at the pharmacy. One such service, GoodRx, claims it saved consumers $1 billion in 2016 alone. A similar service, Rx Saver by RetailMeNot, says that 14% of its users save at least 80% on their prescription costs.

To give you an idea of the potential savings, a GoodRx roundup of prices and discounts for Prednisone—commonly used to treat asthma, allergies, and arthritis—found prices as low as $2.25 for 10 20 mg tablets. That’s an 80% savings from the average retail price.

4. Check independent pharmacies

Don’t just compare prices at big-name chain pharmacies. A recent report from the U.S. Public Interest Research Group looked at prescription pricing for 12 commonly prescribed medications. Smaller and independent pharmacies had much better pricing on eight of those 12, it found, with bigger pharmacies charging anywhere from 8% to 840% more.

Check out Five crucial money mistakes rich people never make via Invest in You with CNBC + Acorns.

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