Ep 19 US Drug Costs are Insane, Part 2

Heather (00:03.022)
Welcome to part two of US drug costs are insane. Two weeks ago, I talked about the history of the rise of drug companies in the US and how the US, okay, start over.

Welcome to part two of US drug costs are insane. Two weeks ago, I talked about the history of the rise of drug companies in the US and how the US pharma system works, including middlemen like pharmacy benefit managers or PBMs, who really seem to complicate the process and drive the list price up, especially for new hot drugs like Ozempic and Monjaro. But today I wanna talk to you about what you can do to possibly change the cost of medications at the register.

Your situation will vary depending on your insurance status. I'm gonna do a brief run through of each insurance situation that might apply to you, uninsured, privately insured, Medicare and Medicaid. And then I'll talk a little bit about ways to save, of which there are actually quite a few, and I'll give some very specific ideas to look into to lower your costs. Every company or website I mentioned today will have a link in the show notes. Feel free to skip over the chapters on other insurances if you want.

and head to later on where we discuss actual ways to save, Or, listen to all the chapters on insurance types just to be well informed. Lastly, before we dive in, if you're enjoying this podcast, head to the website and sign up for my weekly newsletter. That way you'll be the first to hear about new episodes as they drop. And as an extra thank you from me, I'll also include one helpful tip on navigating today's healthcare landscape in every email. And I promise never to share your email with anyone else.

for any reason ever and ever. Back to it. If you are uninsured, this is, albeit unfortunately, the most straightforward situation. You technically have to pay the full retail cost of your medications. Though in reality, there are so many coupon saving companies and discount programs and patient assistant programs and other ways to save that you'll rarely actually pay the full amount.

Heather (02:07.15)
Skip to the chapter ahead called Shopping Around and Beyond That to hear a lot of ideas on how to save. If you have private or employer -based insurance, you are splitting the cost of your medications with the health insurance company. They will pay for a majority of the cost and you'll pay for a smaller percentage of it called your copay. The quotes are required because as I said in last week's episode, your insurance company is getting a huge rebate off the retail or list cost of the drug.

but your copay is calculated off the full retail cost. Welcome to the janky and often unfair modern health insurance system. With private insurance, you will have certain pharmacies that are considered in -network, and you'll have a list of drugs called your drug formulary that they'll cover. As a reminder from last week, if your doctor prescribes a drug for you that's on your company's formulary, the insurance company will cover a large portion of it. If your doctor prescribes a drug that is not on the formulary,

The insurance company will not cover it and you'll be left to pay most of the full retail list cost with or without any coupons that you can find.

Let's move on to Medicare, the government -backed insurance for people over 65 years old. Medicare offers an optional drug plan if you already have regular health coverage with them. If you don't opt in to the prescription drug plan, you don't have coverage for your medications and you will proceed as if you're uninsured. So Medicare, they break their coverages down into what are referred to as parts. Medicare part A covers inpatient care, part B covers outpatient care,

and the optional Part D covers drugs. If you're wondering what happened to C, that's called Medicare Advantage, which is when Medicare allows you to sign up instead with a private health insurance company, and those will include drug coverage as part of their health plan. I'm not gonna get into Part C today because I have an episode coming up shortly called The Disadvantage of Medicare Advantage. The interesting thing about Medicare Part D plans, the prescription drug plans,

Heather (04:13.774)
is that most of them are run by private health insurance companies anyway, like Aetna, Cigna, Blue Cross, and others, which also means that some pharmacies will be in network for you, and some will be out of network, just like the private insurance model. There are about 700 different Part D plans available in the US, and they're region -specific. So for each state, you'll be able to choose from anywhere from 15 to 24 drug plans.

Also, they almost all have deductibles and monthly premiums that you pay out of pocket for. Most people pay a similar amount for Medicare coverage, but your monthly premium is determined in part by your income. I'm gonna say a lot of numbers sort of quickly here, so just listen up. And these numbers are all applicable for 2024, but they do change every year. Everyone will pay a monthly premium for the prescription drug plan if they opt into it. That's anywhere from zero,

to $200 a month depending on the plan and your income. If you make more than $103 ,000 in a given year as an individual or $206 ,000 as a couple, Medicare will tack on an additional income -related premium surcharge of anywhere from an additional $13 to $81 per month. On the other end of the financial spectrum, if you have a low income, anywhere from nine to 15 ,000 if you're single,

and 13 to 30 ,000 if you're married, you'll qualify for some level of the Part D low income subsidy program, which basically gives you a good financial break on your premium. Eligibility for that expanded with part of Biden's inflation reduction acts that started going into effect last year. So thank you for that. So that's how your monthly premiums are determined. Beyond those, the way that these Medicare prescription drug plans operate in terms of what the out of pocket costs will be for you,

beyond your premium is in what's referred to as phases. The first phase of coverage is your deductible, which is typically about 500 bucks for the year. You pay for the full cost of your drugs until you hit that deductible. The next phase is your regular coverage phase, where they pay for most of the cost of your drugs and you pay a smaller percentage of the list price at the register. But then there's something called a coverage gap.

Heather (06:32.014)
After you and your health plan together have spent $5 ,030 in a given year on your drugs, you enter this coverage gap phase. And while you're in that phase, you need to pay for all of your drug costs. It's like they just petered out. Luckily, you'll only pay 25 % of the list price of your drugs because that's what Medicare negotiated for you. Also, Medicare calls this coverage cap the donut hole.

which doesn't have a ton of bearing on this conversation, but I think it's so silly that I wanted to tell you that. How do you get out of the donut hole, you might ask? You have to spend, as of 2024, another few thousand dollars by yourself for the drugs, drugs, at which point you enter the last phase called the catastrophic, at which point you enter the last phase called the catastrophic coverage phase, where Medicare and the prescription drug plan step back in and cover 80 %...

and 20 % respectively of your costs for the rest of the year. Meaning 100 % of your costs are now covered mostly by Medicare itself, not your drug plan. This is why Bernie Sanders is flipping out lately by the way, because if a lot of people end up on Ozempic for decades at $1 ,000 a month of cost, more and more people will likely end up in the catastrophic phase and thus Medicare will end up footing some of the bills for Ozempic, which it literally cannot afford.

If you're thinking that this overall phase approach seems to punish people who are super sick and have a lot of drug costs, yes, I agree. That's sort of what you get when you let private for -profit insurance companies run the show, even for the government -backed drug programs. There are things that you can do to help get past that silly donut hole more quickly, but I'm not going to get into the detail of all that here. I did, however, put a good link on this in the show notes. Last up is Medicaid.

Since Medicaid is a joint federal and state program, both of these entities are involved in running it. Technically drug coverage with Medicaid could vary state to state, but at this time, all the states include drug coverage as part of their plans. If you listened to last week's episode, and even better, took a look at the convoluted drug cost diagram that I kept referring to, I was actually surprised to learn that Medicaid drug costs to consumers have an eerily similar convoluted diagram.

Heather (08:51.982)
I'm not gonna go into all the details of the craziness, but all the regular players are there, including those PBMs again. Anyway, if you're on Medicaid, the way it works is that you go to the pharmacy to get your prescriptions and usually pay nothing, though some states have a copay requirement that's around 50 cents to $2 per prescription. Also, Medicaid covers some over -the -counter medicines as well, like Tylenol. After you've picked up your prescription,

then all the behind -the -scenes players work out the rest of the cost. After you've picked up your prescription, then all of the behind -the -scenes players work out the rest of the cost. All right, now that I've covered generally how the insurances work for getting your medications, let's dive into how you get your costs down. Because unless you're on Medicaid, you're almost certainly paying some amount of money for your drugs. We'll talk about four different ways to save some money. Cost -comparing websites,

online pharmacies, direct discounts from manufacturers, and patient assistance programs. Also, I'm learning this stuff alongside you. Honestly, there are a ton of options out there for cutting drug costs for yourself. So if you have an idea that I don't mention today, or if you don't agree with something I say, let me know. You can email me at drpatientpodcast @ gmail .com or submit a comment through the podcast website, www.

drpatientpodcast .com. Or if you work in this area of healthcare and have a lot to say and want to be a guest on the show, let me know that too. Okay, back to it. Step one, when you are faced with a pharmacy bill, regardless of what your insurance status is, is to price check. Just like when you need a new frying pan, you probably look around at stores in person or online to see what's available and what the cost difference is. Remember, now that medicine and drug coverage is a business,

You're allowed to treat it that way too sometimes. You are after all technically a retail consumer of a product. You can start most easily by picking up the phone and calling a few independent pharmacies in your area that you find on Google or Yelp and ask what their costs are for your specific drugs. And ask them if they'll price match from somewhere else. Some places reportedly do that. There is a seemingly endless list.

Heather (11:12.526)
of apps and websites that have popped up that will help you cost compare. To name a few, GoodRx, RxSaver, WebMD -Rx, RxPriceQuotes, SingleCare, NeedyMeds, and more. Side note, Rx is the medical slang for prescription, so you'll see that as a common part of these online names. None of these places are pharmacies, though. They are just databases of drug cost information.

The way that they work is that you go to their website and you can do a search for your drug name and dosage without signing up for anything. The search spits out a list of physical pharmacies near you where you can get your drugs at the displayed costs if you then register on their site and print out their coupon. But I was both surprised and not surprised at all that the prices are all over the place. I did a search on about a dozen of these online sites.

for the best cost for atorvastatin, which is the generic name for Lipitor, the common cholesterol -lowering medication otherwise known as astatin. I searched for a three -month supply of once -a -day 20 -milligram tablets, so nine D -pills. WellRx .com tells me that the cost of the drug at Walgreens is $168, while RxSaver .com tells me it's $51.

and costco .com tells me I can get it at Walgreens for $24, which means I just have to bring my Costco card with me to Walgreens to get that price. I kept searching and singlecare .com tells me that I can actually get it at my local Mariano's Grocery Store for $8, while webmdrx .com tells me it will cost $137 at CVS. So what gives? Well.

Remember last week's episode when I talked a lot about PBMs? As a reminder, that stands for Pharmacy Benefit Managers, the middleman companies in the pharma market. They negotiate with drug manufacturers on behalf of health insurance companies to create and maintain the health insurance company's formulary. They demand ludicrous rebates from drug makers in exchange for putting the company's drug onto a health insurance formulary. But they also negotiate directly with pharmacies for better discounts.

Heather (13:33.486)
And so the websites that I was just mentioning also negotiate with PBMs for all those discounts. So that's why the price is so incredibly variable at each site, because the contract that one of these online sites has negotiated is different than the contract that another one has negotiated. Ugh, PBMs, please just go away. The question is, are you saving anything at these sites compared to what your insurance, if you have it, would have you pay for your drugs?

Because remember, these sites are showing you the cost that they have negotiated for the drug, which has nothing to do with you or your health insurance company, who is already prepared to pay for part of your prescription and who's already negotiated a discount for you. So as an exercise, I went to my health insurance company's website, that's United Health Care, and found that they have a place where I can search for drug cost comparing. So I entered that same 90 -day supply of 20 milligrams of atorvastatin.

and my cost would be $25 no matter where I go, Walgreens, CVS, local grocery store, or even through my own health insurance company's home delivery system. Because that cost, $25, is what a PBM negotiated for on behalf of my health insurance company. So it's not going to vary. To recap all this, I could use my health insurance drug coverage to get this prescription for $25 or...

I could sign up for free at singlecare .com and get it for $8 at my local grocery store. That's the savings for one round of one medication. So imagine how this could add up for multiple medications over a year. And this is obviously a pretty dramatic example and the savings won't always be like this, but if you're uninsured or on Medicare or if you have a really high deductible drug plan, something like this could be really useful.

Next, let's talk about online pharmacies. More of these seem to pop up every year, and these are actually pretty interesting and promising out looking options to me right now. These are literally pharmacies. For the most part, just no brick and mortar store, it's online and they have a central processing warehouse somewhere. Some popular ones are healthwarehouse .com, Honey Bee Health, Scriptco Pharmacy, DIRX, Mark Cuban's CostPlus Drugs, and Marley Drugs.

Heather (15:59.374)
Though of note, Marley Drug actually has a brick and mortar store in North Carolina, but they also have a big online pharmacy. What's unique about these is that most of them are cutting out the PBMs, the middlemen, and buying their drugs directly from the wholesale distributors. And I guess in this way, they're kind of like industry disruptors. I checked out a few of these and the prices were even lower than most of the details that I found on the price comparing websites that we were just talking about. Though, you have to read the fine print.

For example, shipping costs can range from zero to a lot, depending on how quickly you need them delivered. The way these work is that you ask your doctor to fill out a specific form that you download from their website that basically acts as a new prescription. And then the online pharmacy fills the prescription and mails it to you. I've been doing this for about a year now with a couple of my own meds through Cost Plus.

And the only downside that I can see so far is that I have to wait for the drugs to be shipped to me, which could be a problem if you wait too long to reorder or if you live in an area with super janky postal services like I do in Chicago. So with this model, you need to stay on top of shipping cycles. For all of the companies that I looked at, there are multiple tiers of shipping costs. The cheapest usually is free, but can go up to about $5. And those usually take up to seven business days to arrive.

then the next years of shipping costs arrive faster and faster. But the problem with the latter expedited faster shipping cost is that it offsets your savings. Here's a concrete example. I can get that a Torvastatin 90 day supply for $10 at Honeybee where standard shipping is free. But if I upgrade shipping, I have to tack on anywhere from an additional 15 to $35, which has immediately negated all cost savings.

And then at that point, I'm paying more than I even would with my health insurance company's flat rate of $25. Overall, I like this model of online pharmacies because I hate PBMs. But this model definitely requires more work on your part to stay ahead timing wise, so you don't have to upgrade to more expensive expedited shipping.

Heather (18:11.342)
Next, let's talk about discounts that come directly from drug manufacturers. As far as I can tell, these appear to be only for brand name drugs, not generic. So back to our Atorvastatin example, I Googled Pfizer Lipitor coupon. Remember Lipitor is the brand name and it happens to be made by Pfizer. And I found that they offer a $4 a month coupon there, but fine print again.

The fine print contains a long list of exceptions and restrictions. For example, you can't get the coupon if you're on Medicare or Medicaid. Coming back to last week's episode, which delved a bit into Ozempic costs, I also went to Ozempic .com and I found coupon cards there, but similarly, there are a lot of fine print restrictions. So overall, this model might help you, but you have to spend quite a bit of time reading the fine print. The last model to review is what's called Savings Clubs.

Some big box stores will offer some kind of savings club you can enter into, and you'll have to call your local store to find out more, but I'll review Walmart's infamous $4 prescription program. Walmart offers many monthly prescriptions for generic drugs only that cost from $4 to $10 for a month, and three -month supplies range from $10 to $38. So compared to the numbers we were discussing above, there could be some savings here.

For example, if I go on to get the three month supply of the atorvastatin, I'm now back to the same cost that my health insurance company is offering. But the list of covered drugs isn't very long. For example, atorvastatin isn't even listed on their covered list. I was also gonna talk about Walgreens costs. I have to go back and start this paragraph over.

Heather (19:57.486)
The last model to review is what's called savings clubs. Some big box stores will offer some kind of savings club you can enter into and you'll have to call your local store to find out more, but I'll review Walmart's infamous $4 prescription program. Walmart offers many monthly prescriptions for generic drugs that cost from $4 to $10 and three month supplies range from $10 to $38. So compared to the numbers we were discussing above, there could be some savings here, but the list of covered drugs isn't very long.

For example, a atorvastatin isn't even on their covered list. I was also gonna talk about Walgreens cost saving program here, but it turns out that they're discontinuing the program this summer, so I'm just gonna leave that there. The last thing I wanna mention is a different model of saving money for those who are financially struggling more, and these are called patient assistance programs. These are cost saving programs set up by the drug manufacturers directly.

for those who cannot afford their medications, whether because they're uninsured or perhaps their insurance company doesn't cover that drug or they have exceptional other hardship. A few examples of these to check out are rxassist .org and needymeds .org, both of which are nonprofits trying to connect people to financial savings for their drugs. I'm gonna end all this with a short laundry list of other ideas that don't necessarily fit into the categories that we just reviewed.

And again, you don't have to remember all this. For every episode that I make, I include tons of links in the show notes, but there's also a transcript of the entire episode always available in your podcast platform if they support that or on my website directly. Number one, if you have insurance, check out the mail order option for longer term supply, like 90 days instead of 30 days. It's usually cheaper. Downside is you have to wait for shipping, so you really have to be on the timing of it.

Number two, ask your doctor if they have coupons or samples, though be aware. Sometimes a doctor's office will give you samples of something because it's too expensive for you, but eventually the samples will run out and then you're stuck being on a med that you now really like and want to continue on but might not actually be able to afford. Number three, for over -the -counter stuff, try to buy it in bulk like at Costco or Sam's Club. Number four.

Heather (22:14.99)
Ask your doctor to review your meds and see if you can get off of any of them. That's the best solution. Or maybe you can change to something cheaper or change from brand to generic, which is almost always cheaper. Most of the time, doctors will tell you that generic is fine and the same, but there are a few medications that they might advise you to stick with for the brand name version for. Number five, ask your pharmacist about the cost and if they have any ideas to lower it. They might know of possible discounts or coupons or...

They might recommend you ask your doctor for a different medication even. Number six, if you can handle it, consider filling out different prescriptions. Number six, if you can handle it, consider filling different prescriptions at different pharmacies. That sounds super annoying, I know, but because each drug has negotiated discounts at different places, costs can really differ with the same drug from one place to the next. Number seven, if you or your family member is an inpatient,

Ask the hospital social worker for help. Sometimes they'll have specific advice on ways to save or patient assistant programs. I'm gonna reread that.

Number seven, this is the last one. If you or your family member is an inpatient, ask the hospital social worker for help. Sometimes they'll have specific advice on ways to save or they can connect you to a patient assistance program.

Whew, that was a lot of info. To summarize, your drug cost will depend somewhat on what your insurance is and will also depend on how far you go to research potential cost savings websites and programs. After doing all this research for this episode, I've moved a couple of my prescriptions over to two different online pharmacies and I'm estimating my savings for this year at about $520. So let that be an inspiration and good luck to all of you in your cost savings hunting.

Heather (24:06.83)
And as always, thanks for listening.