Prescription Drug Costs

Chances are you’ve read multiple articles about saving money on prescription drugs.  Use generics, try the mail-order route on recurring prescriptions, consider splitting pills (accurately), and be sure to run the costs through your health insurance and then your FSA.  It is all good advice, much of which you’ve heard before.

In the scheme of healthcare costs, prescription drugs are generally considered one of the “good” expenses in healthcare.  It is cheaper to treat your high blood pressure than be affected by the consequences of it, for example.  Still, within the vast realm of prescription drugs, there are many variations of choices as well as costs.  Based on reader questions and forum posts, we’ve compiled a list of three questions that have been asked often as of late.  Below are the questions, along with some thoughts around each issue.

1)  How much do I save by using generics instead of brand name drugs? It varies greatly, and it shouldn’t be a financial decision alone.  Some patients find that they respond differently to a generic than a brand name drug, although it could be the placebo effect at work.  In general you’ll likely save at least 50% on generic drugs, and it isn’t rare to see savings of up to 80%, so it is definitely worth considering anytime it is an option.  In addition, a consumer-friendly trend has emerged in the past couple years – the deep discounting of certain generics by major pharmacy chains to as little as $4 per month – which may make the savings even greater.

2)  If I have a prescription for a brand name drug, can my pharmacist prescribe me the generic equivalent instead? No.  Only if your doctor, on the prescription, wrote something to the effect of “Generic OK” can a generic be substituted for the brand name.  A pharmacist has to be very literal when they fill the prescription.   That is why it is so important that you have the discussion about generic alternatives when you are talking directly with your doctor.

3)  Can my doctor make me come in for an office visit just to get a new prescription of a recurring medicine I take? Yes.  Doctor’s have a responsibility to make sure your prescription is still the right one for your condition, given changes in your health, other drug interactions, or other factors.  If you have a prescription that enables you to get three refills, you should be able to get your three refills without another visit.  However, when that prescription is done and you need another month’s supply, the doctor has every right (and a responsibility, actually) to see you to make sure the prescription is still calibrated to your situation.

This guest column is from Paul at HealthHarbor.  HealthHarbor is a site devoted to helping people be smarter consumers of healthcare.  It provides ideas and guidance on saving money on healthcare, interactive tools for controlling healthcare costs, and hosts an online community devoted to healthcare spending topics.


  1. #2 is incorrect. Unless doctors specify otherwise, pharmacists (really, the insurance companies) can substitute a generic. It’s only if they check off a box that says “Dispense as written” does that mean no substitutions are allowed. In other words, the doctor has to specifically say “This and only this” when they prescribe, otherwise a generic could be substituted without consultation.

  2. Good post. I’m going to start using the linked website for the few prescriptions we have.

    Unrelated: You know you have a financial blog when “talking directly with your doctor” turns into “talk-ING Direct-ly with your doctor.”

  3. Don’t forget also even with generics– call around. And check Costco first. The difference between 30 days of generic ambien at Costco and Walgreens is $50. (Unsurprisingly Costco puts their prices on the web. Most places don’t.)

    You don’t need a membership to use the pharmacy at Costco. Some kind of law or something.

  4. Something to consider if cost is a factor (ie, no health ins or precription coverage) is to ask the pharmacist for an over the counter equivalent. We’ve done this twice in the past, with prescriptions that weren’t covered by our plan and saved quite a bit of money. And yes, the the over the counter meds did work.

    Medications are constantly being reclassified and we found out the OTCs can be as effective as the presciptions.

  5. Just wanted to add that #1 is vital – my treatment for chronic depression related to PTSD required antidepressants. The generic version of the particular drug I was on had an FDA-allowed batch variance of +/- 5% of the active formulation – meaning taking a 50mg dose could be 40 or 60mg. I was sensitive to that difference and was experiencing manic episodes that were very DANGEROUS to me and to my family. Luckily, my doctor was attuned to my needs and got me straightened out by requiring the brand name (which could only vary 2% from formulary) and fighting my insurance company on my behalf to get them to pay for it, but saving $40/month was NOT worth my health (or my daughter’s when I got manic while driving)…Just another perspective.

  6. I’m neither a doctor nor play one on TV. But I’ve found that as a crude approximation, the smaller an effective dose of a drug, the more it starts to matter whether you get generic or prescription.

    This is especially true when dealing with SSRIs and other antidepressants. Things that are effective in small doses and/or effect the brain, I’m a bit leery of generics, though I’ll try it.

    But one crucial piece of advice you’re missing FrugalDad: If you want to save money on your perscriptions, ASK YOUR DOCTOR! Tell him that you are having a difficult time financially (if you’re in debt, that’s a reasonable claim), and ask if he has any suggestions. From talking about generic vs name brand FOR YOUR SPECIFIC medicine to discussing cheaper alternatives, doctors can help you save money…but you have to ask, they’re not going to bring it up to avoid offending you.

    I recently told my doctor I had no choice but to be uninsured for a month, she responded by giving me six months of free samples for all my drugs that were going to expire within a year anyway, and thus would have gone to waste. She also told me that for my specific meds, they were safe up to 6 months after expiration. Then she griped about private insurance for a few minutes, and I got the impression she’s been having more than a few patients lose insurance lately.

    But seriously. Doctors know a lot more than they’ll volunteer, you have to know what to ask. True when it comes to your health, and true when you’re saving money.

  7. Also I recently read an article about Partnership for Prescription Assistance. I think it is based on income guidelines. You could qualify for reduced cost or free prescriptions. The website is

  8. As was stated, comment 1 is correct (at least in many locations). In order for a specific brand to necessarily be dispensed, the doctor needs to write or check by the “may not substitute” or “dispense as written” box. Simply signing on the “may not substitute” line does not make the prescription a DAW-1 (i.e. brand only) item.

    That being said, the patient can request a brand as opposed to a generic if they would like (DAW-2). They often pay more for this designation, as the generic is allowable by the physician. Ultimately, as another commenter noted, this is mandated by the insurance companies the most, though pharmacies do certainly make more money off of generics than brand name drugs.

    It truly astounded me when I worked at a pharmacy how little people truly understood about their drug benefits. And while it is true that pharmacies do charge different prices for different drugs, unless you are paying a percentage of the drug price, it doesn’t matter. Flat copays will be the same dollar amount (as determined by your insurance company) no matter where you go.

    And the limitations based on quanity are also determined by the insurance company, not the pharmacy. There are certain laws that regulate the dispensation of control medications, especially schedule II meds, but again, these are laws, determined by the state, not by the pharmacy.

  9. What really gets my goat is these new drugs where they put two generics together and then charge an arm and a leg for it! I’ve seen ads on TV for Caduet. It has two ingredients. One is Amlodipine and the other is Atorvastatin. With my RxDrugCard I can get 30 tablets of Amlodipine for $9 and 30 tablets of Simvastatin for $9. I’ll bet they are charging more than $18 for this! The unthinking public is going to pressure their doctors into giving them something just because it’s new, when something old or generic would do the job for cheaper.

  10. Adam,

    Caduet is a combo drug, but it is a combo of the brands. And yes, you are seeing the ingredients… but they’re the ingredients in the brand (as well as the generic). The differences between brand and generics are filler chemicals and actually, Simvastatin (generic for Zoror) is one that some people don’t react well to (or so they say). The other generic Amlodipine is generic for Norvasc.

    The drug companies want to continue to make money and they can do it by patenting these combo drugs. The patent on the brand ran out (that’s why there’s a generic) so they lost their market share to the generic drug makers (and thus the income stream) and they’re trying to get it back. From the consumer’s point of view, they only have to take one pill a day as opposed to taking two. May not seem like a lot, but if it is in addition to a large pill regimen then it may make a difference!

    Ultimately, these drug companies are big business. They absolutely have a product people need… so they’re seen as providing a helpful service, but it’s business. That’s why when you go to the doctor, they have samples and coupons and why the doctors always have tons of “things” from the drug companies (clip boards, pens, coffee mugs, etc). When there are similar drugs available, the pen a doc uses may just nudge them one way instead of the other and all of a sudden, the drug company is making more money.

    I mean, I do get it in one sense. I’ve heard patients asking pharmacists why brand meds cost so much. The answer is multi-faceted. First, the drug company producing the brand had to do all of the testing to make sure the drug is safe and to be compliant with the FDA. The second is… because they can. While there may be some less expensive alternatives for many drugs, there are not. In many cases, people need the drugs to stay alive. They (the patient) aren’t going to put a premium on their life, so they pay, thus the demand remains high.

    The final reason goes back to something I said in my last comment… It’s the insurance companies. They will pay for the expensive drugs (and for the expensive doctors, etc), but ultimately, it is you and me who pay. Premiums are going up, up, up because the costs are going up, but the service, by and large, is not changing. This does have to do with the doctors’ insurance, which is going up, but it also has to do with the fact that there are no (or remarkably few) factors driving the prices down.

    Don’t get me wrong. A doctor has to go through a TON of school to get his degree and most work very, very hard. The closer we get to socialism, the less the doctors will get paid and the less incentive there is to go through that. And if the cost goes down, I’m afraid the quality will follow suit, which I don’t want to see happen. I think there does need to be reform… but it needs to be internal reform by the medical industry, not government mandated reform.

    But I digress… that is a discussion for another time!

  11. Point Special,

    It is illegal for doctors and physicians to advertise (wear) any certain brands by using clipboards and wearing other items with the brands name on them now.

    The FDA really doesn’t have our best interests in mind. Also, quality of service.. You’re in, you’re out. $30 just like that. There are definitely problems with the ideas of socialism with health care but I agree with Obama on the point.. the status quo is not working.

  12. Great post. I seriously doubt anyone would truly find that a generic works different from a brand name, but like you said, it’s probably a placebo affect.

  13. In many cases the brand name does work better.

    The only socialism in Medicine is the CDC. Those are government workers paid to do whatever, since they can’t even cure MERSA. The top dogs get a government pay check and a patent for their fancy vaccination.

    The FDA is a revolving door between themselves and the drug makers. Scurvy is a Vitamin C deficiency but the FDA will not allow anything but a prescription medicine as a treatment. The FDA allows some 60,000 food additives. They also allow genetically modified food. Google Excitotoxins the Taste that Kills, by Dr. Blaylock.

    Health care profits are made by treating disease, not healing. TV ads push more pills, more vaccinations. Doctors and hospitals increase profits with more operations. While the government pays for 50% of health care now it is not socialism. The bill from a hospital stay would be like going to the store and buying eggs, then several months later, you get a bill from the chicken, the farmer, the truck driver, the stock clerk and the check out person. The industry Lobbyist have created a Monopoly and set the rules for what is paid. The whole health care system needs a redesign and the incentives need to change. Health care costs are now 20% of household budget and climbing. In cases where people are sick, their monthly insurance bill is more than their mortgage payment. Health care costs are crushing small business owners and taking away money from the consumption of real goods and services. A society is not better off because it treats the disease it creates and the population pops pills starting in school at an early age with Ritilin and Adderall, fancy names for methamphetamine.

    The Drug companies have an Army of beautiful sales people that call on Doctors at the same time as patient hours. After your 10 minute office visit the M.D. probably couldn’t pick you out of a police line up. The visit doesn’t try to find that cause of your problem, just to hear a set of complaints which a drug that was tested for effectiveness verses a sugar pill.

    Listen to the drug ads on TV and all the side effects. In Magazines look on back page of drug ads. Many written side effects are now four pages long.
    While drugs can save lives during emergencies, the least number of drugs you take the better. Niacin works better than Lipitor. Cholesterol is not a disease, it is a precursor to hormones, nerve sheaths and a major component in every cell membrane.
    While one my only pay a co-pay for a prescription, we all pay in insurance premiums, social security taxes and other taxes. We also pay since PhARMA companies are the worst polluters.

    Not to mention the billion dollar fines paid by drug companies for fraud and marketing violations. The CEOs need to go to prison.

    For the cost of the many drugs people are prescribed, it would be cheaper to stay at a World Class Health Spa.

    Just saw Pristig ad on TV, it says that it may work by treating to chemicals in the brain, serotonin and norepinephrine. Sorry serotonin is mostly in GI tract and norepinephrine is an adrenal chemical. The drug comes with deadly side effects.
    Stop the INSANITY. Real food by God is your best medicine.
    Love to all,
    Dr W. David Berglund