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How Much Do You Spend on Prescription Rx?

Prescription drugs (Rx) have become a necessity for most Americans, and many people who are employed and covered by a group health plan have a prescription drug card (Rx Card) to assist with the high cost of meds.  The Rx Card allows for a co-pay level that is tiered based upon the type of drug prescribed.  Lower cost generic drugs typically have low co-pays, while more complex brand name drugs have a higher co-pay amount.  Very expensive meds, including injectable formulations, fall into the highest tier and frequently come with co-pay amounts that compute to a % of the drug cost. Those drugs are frequently very complex and expensive.

Today, more people are covered by a High Deductible Health Plan (HDHP) coupled with a Health Savings Account (HSA), whereby a Rx Card is not customary.  While there are tax benefits connected to the HSA, one of the sacrifices is that you share more in the initial cost of treatment until you have satisfied the Out of Pocket (OOP) maximum amount.  In most HSA plans, this includes prescription drug costs.

Recently, prescription drugs have become a targeted item by consumers.  Many insurance companies have dropped certain popular and expensive brand name drugs from their formulary.  The National Blue Cross and Blue Shield Association completed a 7 year analysis of Rx utilization, price changes and costs.  That study concluded that, since 2010, spending on prescription drugs has increased 73%, or roughly 10% per year.  This is despite the rise in generic Rx use during that same time period.  The increase is predominantly due to a smaller fraction of emerging drugs and larger year-over-year price increases that are more than offsetting the growth in lower cost generic Rx use.  

It’s easy to blame the pharmaceutical companies for high prices; however, one must dig deeper to understand the complexities involved and dollars invested to bring a Rx solution to market.  Based on the FDA and affiliated governmental requirements surrounding testing and trials prior to approving a drug, don’t hold your breath for a quick decline in the costs of bringing the solutions to market.
There are some practical tips for you to follow in order to better manage your Rx costs.  

  • Always ask your doctor if there is a generic equivalent for your prescribed drug.  For most common Rx needs, you will typically find a generic solution and save money.  A generic equivalent has the same chemical composition as the brand name drug, thus you are receiving the same treatment.
  • When a generic equivalent is not available, ask your doctor if there is a generic alternative for your prescribed drug.  In this case, you are not receiving the identical chemical composition of the original drug; however, many times an alternate drug will effectively mitigate the problem at hand.
  • When generic alternatives are not available and there are no competing brand names at lower costs, you can seek discounts that are offered by pharmacies and pharmaceutical companies.  These discounts are seldom advertised and frequently overlooked.
  • Use the mail order option to receive your maintenance Rx meds.  You can typically save by utilizing the insurance companies recommended mail order vendor by receiving a 90-day supply of the meds at a discounted price.
While the Health Care scene continues to tremble, costs don’t appear to be declining.  At least there are some techniques that you can employ to assist in lowering the incredibly high costs affiliated with modern day medicine.
 


Scott Seyfarth
Hipskind Seyfarth Risk Solutions LLC
scott@hsrisksolutions.com
312-627-9100
 

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