How You Can Save Money on Your Next Prescription Refill in Detroit

Why Do Generic Medications Cost So Much Money?

There's a wide variability in the cost of generic medications from pharmacy to pharmacy. Researchers at Saint Louis University surveyed 175 pharmacies and asked for their prices for the meds Lisinopril, Carvedilol, and Digoxin. These are common heart failure medications.

The researchers found that the prices for three generic medications ranged from less than $20 to more than $150, with the highest price for all three medications being $397 for a 1 month supply!

This is way too much money. If you spent $150/month on medications alone, it would cost $1800 for the year. In contrast, if you spent less than $20/month on these same medications, it would cost less than $240 for the year.

This is a difference of $1,560.

Unfortunately, these costs have the greatest adverse effect on low income communities because they may not have the transportation resources to drive to these less expensive pharmacies. In Detroit, 33% of residents do not have access to reliable transportation, leaving these folks to the potentially higher costs pharmacies in lower income neighborhoods.

Middle Men and How They Inflate the Cost of Your Care

First of all, understand that when you buy medications from a retail pharmacy, you will likely incur a retail markup on your medications. This markup can be 10%, 50%, 100%, 300% or more, as illustrated in the Saint Louis University study cited above. So, shop around and find the best price before setting foot into your neighborhood pharmacy.

The next thing that inflates the cost of your prescription medications are middle men, namely pharmacy benefits managers. These PBMs are supposed to negotiate the formulary (or the medications covered by your insurance company) and their related costs at the local pharmacy. However, the system is full of self-serving PBMs who make more money based on inflating the costs of your medications.

To illustrate, you should be familiar with the term “clawback.”

A “clawback” happens when the patient's copay is more than the pharmacy's cost for the drug. For example, if a customer's prescription copay is $20 but the pharmacy's cost is $5, the PBM claims -- or “claws back” -- the extra $15, which it keeps as profit.

That’s right - if your son or daughter has strep throat, and you want to buy Amoxicillin, and the cash price is about $5, as it should be, but the PBM “negotiated” the price to be $20, and you buy that Amoxicillin with your insurance, you’d pay $20 for the $5 medication and the PBM keeps the difference.

Infuriating, I know! I’m just as mad about this issue as you are.

How You Can Save Money on Your Next Prescription Refill

So, how can you save money on your medications? First, ask around for the best price at different pharmacies. If your insurance-based price is too high, ask your pharmacist for the cash price. Only until recently, pharmacists had a gag order, where they couldn’t tell you the price of the medication if it was cheaper than the “negotiated” insurance-based price.

Another possible solution is Direct Primary Care. DPC doctors like myself buy medications at wholesale prices and give them to our patients at cost, or with a 10% mark up to cover the cost of shipping and handling. For example, at our clinic Plum Health DPC, we can wholesale these same three medications for about $18/month.

I created this video to more fully explain what I mean, see below.

- Paul Thomas, MD

If you’d like to be a part of our direct primary care service at Plum Health in Detroit or Farmington Hills, Michigan, you can sign up, here: