Shopping for Drugs: 2007
Table of Contents
- Executive Summary
- Comparing Prices
- Therapeutic Drug Substitution
- Bulk Buying
- Pill Splitting
- Generic Drug Substitutes
- Switching to Over-the-Counter Drugs
- Weighing the Costs and Benefits of a Drug
- Case Studies: Price Comparisons for Specific Drugs
- Buying Drugs Abroad
- Financial Assistance to Lower Drug Costs
- Notes & Appendix
- About the Author
Consumers have never had more opportunities to obtain information about drugs and possible substitutes, and to compare prices. Shopping around town or via the Internet for price information can pay big dividends.
"Smart Shopping: Compare prices."
Local Pharmacies. Prescription drug prices at different pharmacies can vary widely. In Missouri, prices within a single city differed by 3 percent to 16 percent for brand-name medications and by 39 percent to 159 percent for generic medications, according to a survey sponsored by the Heartland Institute.6 However, prudent shopping would save Missouri consumers almost 10 percent on branded drugs and a whopping 81 percent on generics, on the average. In Houston, Texas, a physician who surveyed prices for generic drugs she prescribed found they varied by 50 percent to 80 percent.7
Interestingly, small independent pharmacies often have better prices for generic medications than large chain stores.8 Take the generic form of Prozac (Fluoxetine) used to treat depression. 9 When it first became available in generic form, many pharmacies marked up Fluoxetine by 3,000 percent to 5,000 percent over its wholesale cost.10 As a result, in Detroit, Fluoxetine cost almost $47 at stores in the CVS national chain, but sold for less than $9 at the local Beacon Hill Pharmacy.11
Drug prices also vary depending on geographic location. For instance:
- In 2003, 30 doses of 20mg Fluoxetine cost as much as $55 at Walgreens in central Iowa,12 but only $40 at a Walgreens in Florida.13
- Currently, the price for a 30-dose supply of Fluoxetine (20mg) in Jacksonville, Fla., varies from a low of $13.95 at a Save Rite Pharmacy to $99.75 at Halliday's & Koivisto pharmacy.14
Patients should also consider wholesale club chain stores, which consistently have the best prices. (Note that Costco and Sam's Wholesale do not require membership to use their pharmacies.)
However, the lowest local price may not be the best price a consumer can get - online pharmacies often offer even lower prices. Online prices for Fluoxtine can vary from $6.59 at Costco.com to $33.94 at Walgreens.com.15 Thus, the lowest price source for a drug may not be local, but on the Internet.
When Pharmacies Compete. Many consumers will benefit from the new drug pricing policy at Wal-Mart: $4 for a 30-day supply of some 314 generic prescription drugs.16 As of October 2006, the program was available in 27 states, although Wal-Mart expects to eventually roll out the policy nationwide. These prices are available to all customers, with or without insurance.17 Wal-Mart said these generic medications account for almost 30 percent of the prescriptions filled at its pharmacies in Florida, the first state where it offered the program.
"Wal-Mart, Target and other large chains are competing on price."
Other companies are also developing ways to offer customers lower prescription drug prices. For example, Target has announced its intent to match Wal-Mart's prices.18 Wegmans, a chain of grocery stores in five states, recently launched a program that includes almost 100 different generic drugs.19 Customers pay only $11.99 for a 90-day supply. 20 Even more remarkably, two pharmacy operators have decided to give away generic prescription drugs. In Columbus, Ohio, Giant Eagle is offering free generic versions of seven different antibiotics and four cough-and-cold medicines to patients with a prescription. Similarly, Meijer stores, with 176 locations in five states, will offer seven generic antibiotics free of charge to all patients with a prescription.21 President Mark Murray says the program includes about 70 percent of the generic pediatric prescriptions filled at Meijer stores, and will save parents without insurance coverage as much as $40.22
"The Internet is a valuable tool for information."
Internet Information Services. Generally, the Internet is a patient's most valuable information tool, whether they are comparing prices or learning about drug interactions. For instance, Florida has a Web site that records prices at all pharmacies across the state. The Web site illustrates how prices can vary significantly from pharmacy to pharmacy. At last check, a 30-day supply of 50mg Atenolol in Duval County ranged from $7.95 at a Winn-Dixie Pharmacy to $36.48 at Panama Pharmacy.23 Also at last check, across Miami-Dade County the price for the same prescription ranged from a low of $5.20 at Citrus Health Network, Inc.'s pharmacy to a high of $137.87 at Statscript Pharmacy.24
In general, patients everywhere can find a wide range of prices for prescriptions by checking a few Internet pharmacy Web sites. As the case studies in the appendices illustrate, consumers can save as much as 97 percent or more in some cases. [See Appendices B, C and D.]
Reverse Auction Web sites. Several reverse auction Web sites - including BidForRx.com, PillBid.com and BidRx.com - allow participating local pharmacies to submit competitive bids to fill prescriptions.25 In a reverse auction, patients enter information about prescriptions they want to fill. Participating pharmacies have a set amount of time to submit the lowest price they are willing to accept to fill the prescription. The consumer can choose among competing bids (likely accepting the lowest) and then print an invoice to take to the pharmacy.
Currently, BidRx has several thousand local pharmacies and several mail-order pharmacies under contract.26 Consumers can limit the auction to nearby pharmacies. Web site testimonials from clients report significant savings. A similar type of service has already been proposed by former House Speaker New Gingrich, currently head of the Center for Health Transformation.27 He estimates that a reverse auction model for Medicaid would reduce prescription expenditures by 40 percent.28 This type of service could become as common as selling or buying on eBay.
DestinationRx.com and Rxaminer.com. Rxaminer.com is a Web-based service that helps patients find cheaper medications comparable to the ones they currently take.29 Customers enter names and dosages of medications; Rxaminer compares them, suggests substitutes (often several) and allows patients to print reports detailing potential savings. Patients then can discuss these reports with their physicians to see if the cheaper medications are appropriate.
Another unique Web site called DestinationRx.com collects prices from numerous competing online pharmacies, allowing consumers to compare prices without going to individual pharmacy Web sites. This service also works with the new Medicare.gov Web site and is an important tool to help seniors choose a Medicare prescription drug plan. [See the sidebar: "Special Opportunities for Seniors to Save: Comparing Medicare Drug Plans."] Seniors can enter the drugs they currently take and find the prices for drugs under competing drug plans. Prices can vary considerably.