Patients and Physicians Can Cut Drug Costs

Published February 1, 2005

Consumers have never had more opportunities to obtain information on drugs than they do today. Yet chronically ill patients without drug insurance coverage often spend far more on prescription drugs than necessary.

If consumers simply were to use the same buying techniques they routinely use when shopping for other goods and services, the cost of some common drug therapies could be reduced by more than 90 percent. Experience shows patients can work with their physicians to cut costs substantially by becoming smarter consumers.

Drug prices vary considerably from pharmacy to pharmacy, and patients with a prescription can find even better prices by clicking on a few Internet Web sites. Additionally, Web-based services can help patients find therapeutic substitutes–medications that are cheaper than their current prescriptions.

Therapeutic Substitution Possible

Ideally, the first place to start the process of lowering drug costs is at the physician’s office. Doctors control the prescription pad and generally order medications with little input from their patients. However, most physicians will work with patients who ask about less-expensive drug therapies.

In particular, patients should inquire about lower-cost therapies when doctors offer “free samples” of medications. Lower-cost therapies available in generic form are never handed out as free samples. Only the newest (read: expensive) treatments that drug makers wish to promote are distributed to doctors’ offices by drug reps.

Physicians want to help their patients, of course, and they are often especially generous when giving samples to individuals lacking drug coverage. Samples of expensive drugs allow patients to try new therapies at no cost.

But rather than defaulting to the newest medications for which free samples are available, patients should first ask their physician for a prescription that allows them to try a generic medication.

Even if patients must try these generic drugs at their own expense, the refills will cost far less than newer, sampled drugs that were initially free. A recent survey by IMS Health, a health care market research firm, estimates the average cost of a branded medication is more than $80 per prescription. This includes therapies that are new and under patent protection, but it also includes branded versions of therapies for which the patents have expired.

By comparison, the average cost of a generic drug prescription was less than $25, according to the survey. And even generic drugs are expensive when compared to over-the-counter (OTC) substitutes. An OTC drug purchase costs an average of about $7, according to Dr. Timothy Covington, a professor of pharmacy practice and director of the Managed Care Institute at Samford University’s McWhorter School of Pharmacy in Birmingham, Alabama.

According to a report published in 2003 by Ipsos-Insight, a market research consultancy, a majority of U.S. physicians report they routinely recommend OTC drugs to their patients. In fact, OTC drugs are more widely used than prescription drugs and account for 60 percent of all drugs used in the United States. Today, consumers have access to a market with more than 100,000 different OTC drug products. More than 700 of them were previously available only by prescription.

Internet Useful

Patients can reduce drug costs further by doing some research before visiting a doctor. The Internet provides a wealth of information about medications, including therapeutic substitutes, common doses, and price comparisons. A new phenomenon is online user groups, where patients discuss their satisfaction with various drug therapies.

A good place for patients to start, and physicians to recommend, is the Web site, cofounded by cardiologist Joseph Rogers. In his practice, Rogers often helped patients find therapies they could afford. Having seen the need for a source of convenient information on therapeutic alternatives, Rogers helped create a Web site where patients can input their prescribed medications, including dose and times per day, and view a report on the annual costs for therapeutically similar treatments.

For instance, a patient taking the proton pump inhibitor Nexium would find five other therapies–the least expensive of which is about 80 percent cheaper. Further comparison-shopping on the Internet would reveal two additional OTC remedies not mentioned in the report. Two of the remedies in the report are also available OTC for much less.

Savings Can Be Impressive

As a result of such research, a senior spending $4.20 per day for Nexium could opt for OTC Prilosec, which is from the same drug class but is much cheaper, at $0.70 per day. A senior making this one change could save nearly $1,300 per year on drug costs.

Many gastroenterologists advise seniors to first try the older class of ulcer medications known as histamine receptor antagonists. Many of these drugs–including Zantac, Pepcid, and Tagamet–are available OTC as both generic and branded medications. A patient taking twice-daily doses of 150mg Ranitidine, the generic version of Zantac, can get it from Costco at a daily cost of 10 cents. The monthly savings of more than $120 add up to nearly $1,500 per year compared to the cost of Nexium or Prevacid.

Further Savings Possible

By refusing to cover specific doses of certain medications, many HMOs force patients to split double-strength tablets. This works because many drugs sell for the same price regardless of the dose purchased. Although the process of splitting pills can be somewhat annoying if required by your HMO, it may be acceptable for patients who benefit from the savings.

For instance, regardless of whether one takes a 25mg, 50mg, or 100mg tablet of the antidepressant Zoloft, the cost per month is about $70. A patient prescribed either a 25mg or 50mg dose of Zoloft could save 50 percent by purchasing the double-strength tablet and splitting 15 tablets per month, thereby saving $425 per year.

Patients willing to buy in quantity can also save significant amounts. Buying a 90-day supply of branded medications, rather than buying month-to-month, can save 15 percent. Purchasing a three-month supply of a generic drug can save even more–as much as 40 percent.

In many cases a patient can combine several of these methods for even greater savings. For example, a patient taking a daily 50mg tablet of the cardiac drug Tenormin will spend about $500 per year. However, if the same patient opts for the double-strength 100mg generic substitute (Atenolol) purchased in quantities of 100 tablets and splits them into 200 50mg doses, the yearly cost falls to less than $20.

All these techniques require the cooperation of one’s physician. Doctors are generally more willing to discuss these options when their patients come prepared with information, such as a cost comparison from

Physicians often are not aware of the cost of medications they prescribe. When a comparison of therapeutically similar drugs illustrates treatment costs can vary by more than $1,000 a year, many physicians will be more than willing to help patients try new options.

Every patient interested in saving money on drug therapies should consider this common-sense solution. And every physician responding to a patient complaining about high drug costs should recommend the same common-sense solution: smart shopping.

Devon M. Herrick, Ph.D. ([email protected]), is a senior fellow at the National Center for Policy Analysis.