You’ve probably seen these discount cards at your doctor’s office or local pharmacy or maybe you’ve seen them advertised on TV or the internet and wondered what they were. Are they a scam? Who is eligible to use them? Maybe you’ve wondered why you would need them if you have insurance. Obviously, there is a reason these cards exist and it’s not easy to explain. So put on your thinking caps because this read is gonna make your head hurt.
There are two different kinds of cards. One type of card issued by the drug manufacturer for a specific drug is called a “co-payment card.” The other kind of card is a “pharmacy discount card” and was originally intended for cash paying customers.
Co-payment cards or manufacturer cards are used to market a fairly new brand name drug that the pharmaceutical company wants to push and is used with your insurance. They are great in the beginning, but not so good a year or two down the line when the discounts go away. Pharmacy discount cards are generally used for drugs that the customer is paying cash for and therefore are not used in conjunction with insurance.
To understand prescription discount cards you should first know what pharmacy benefit managers (PBMs) are. You must also ask yourself who is getting paid and benefiting from these cards? So PBMs were developed in the 1970s but really took off in the ’80s with the explosion of pharmaceutical drugs and the rising costs of these drugs. The PBMs were originally tasked with trying to keep costs down for insurance companies. They negotiate drug prices with pharmacies on behalf of the insurance companies. This results in formularies, or approved drug lists, and they vary for different insurance companies. In the beginning, this system actually worked to keep drug costs down for both the insurance companies and the consumer. So the PBMs must get paid some kind of incentive to keep costs down, right? The answer is kind of.
The first problem is that none of us know what the prices are for the medications we purchase. How do we know if we are getting a good deal if we don’t know the price to start with? It’s not like we can stroll down the aisle like in a grocery store and see the prices stamped on the box. The second problem is the negotiations for the discounted drug prices by PBMs are shrouded in complicated layers and confidentiality agreements that vary from insurance to insurance and pharmacy to pharmacy. So on the surface, everything seems pretty clear that PBMs are negotiating better prices for us all. And to answer how PBMs benefit, they charge pharmacists fees and they can sell your information to third parties for big profit.
How do pharmacies benefit? The pros for them is that by accepting the cards they will bring more customers through the door, increase customer loyalty and they can increase the sale of nonpharmaceutical merchandise. The con for the pharmacies is that they are going to have to take a discount on the drugs they sell and the fees can be so steep that they actually lose money on certain drugs. They are also often bound by “gag clauses” that prevent them from divulging cheaper alternatives to their customers, which now places the responsibility on the customer to ask what is the cheapest option when purchasing medications.
So what do you as a customer need to know when using these discount cards? First, never pay for a card. Second, never register for a card because they can sell your information for profit. Third, call their helpline to get informed on these different cards. Fourth, try to shop around with the understanding that this can be difficult. Fifth, while I stated earlier that pharmacy discount cards can’t be used with insurance, there are special exceptions such as the “donut hole” for the Medicare prescription plan which you should ask about. Lastly, while co-pay cards are great for brand name drugs, consider asking about generics as an alternative.
So what is the take-home message here? If you have to be on a brand name drug then co-pay cards may be beneficial to you, so be sure to ask your physician or pharmacist about any and all discounts and rebates for your medication. Realize that Walmart offers a 4 dollar prescription plan for a wide variety of generic medications. If you think using your insurance is gonna be your cheapest option consider asking the pharmacy about discount cards like ‘Good Rx’ to see if paying cash is actually cheaper for you.
If you’re a little confused after reading this article about what you’re cheapest options are when purchasing your medications then join the club. The system, unfortunately, makes it difficult for consumers to shop around. So I don’t have any straightforward advice on whether or not prescription discount cards will be helpful.
There is a study from the American Medical Association that indicates we overpay for our prescriptions 30-40 percent of the time. So do your homework, talk to your doctor, talk to your pharmacist, do your research, get the best deal you can and as usual feel better, Hays County.
--
Dr. John Turner is a family medicine and emergency medicine doctor with 25 years of experience. He is also the owner of My Primary Care Clinic and My Emergency Room 24/7 here in Hays County. Dr. Turner may be reached at 512-667-6087.
