NCPA - National Center for Policy Analysis


January 10, 2007

By taking advantage of the Internet, seniors can greatly reduce their out-of-pocket costs by choosing less expensive drug therapies and by choosing a plan that best meets their needs, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis.

Armed with information about therapeutic substitutes, a senior can use the comparison tool on the Web site to find the plan with the lowest out-of-pocket costs. also assists with monthly cash flow management by breaking down each senior's monthly cost for drugs, copays and premiums.  This makes it easy to determine when (and if) a senior can expect to reach the doughnut hole before the year ends.  It also allows a senior to easily budget monthly drug spending. 

For instance, DestinationRx, which provides the technology behind the plan comparison tool, found that out-of-pocket costs for a hypothetical senior in Denver with four chronic conditions, taking a five-drug regimen varied widely among popular Medicare Part D plans in the area:

  • Using the name-brand drugs, annual out-of-pocket costs ranged from $2,692 to $3,752.
  • However, using lower-cost therapeutic substitutes, annual costs ranged from $622 to $1,777.
  • Thus, a senior could potentially save $3,130 in out-of-pocket costs by using therapeutic substitutes and choosing a low-cost plan.

A senior might save even more by using other smart-buying techniques, such as buying in bulk through a drug plan's mail-order option and by pill splitting (buying medications in double-strength and splitting them in half).

Rather than expand Medicare or deny seniors access to the latest drugs, Congress should allow seniors to keep shopping, benefiting themselves and taxpayers.  Through their behavior, seniors can do more to keep drug prices down than anything Congress is likely to do, says Herrick.

Source: Devon M. Herrick, "Seniors' Drug Costs: Government versus the Internet," National Center for Policy Analysis, Brief Analysis No. 576, January 10, 2007.

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