According to pharmacy benefit manager Express Scripts, brand-name drug prices increased 16.2% in 2015 and they've skyrocketed 98.2% since 2011. Runaway drug prices are forcing insurers to increase patients' share of the cost of medicine, resulting in consumers shelling out more money for their prescriptions than ever before. If you're looking for ways to reduce your monthly spending on prescription medicine, we have a few suggestions.
In this clip from The Motley Fool's Industry Focus: Healthcare podcast, healthcare analyst Kristine Harjes and contributor Todd Campbell walk you through some of the best money-saving tips for controlling how much you spend on medicine.
A full transcript follows the video.
This podcast was recorded on Sept. 28, 2016.
Kristine Harjes: Let's start with shopping around for the medications and drugs you need.
Todd Campbell: Yeah. People are probably going to be pretty surprised, but there's a very wide range of prices that you can pay for prescription medicine depending on where you get it filled. The price that you might pay at a CVS might be very different, for example, than the price that you could pay at a Costco or a Wal-Mart, depending upon that drug. So, it's very important for consumers to think about what medications they're regularly getting filled, are they generics or brand-name drugs, and if they're generics, especially, make sure you check out those big-box retail stores. Places like Wal-Mart and Target and even some supermarkets have deals where they offer prescriptions for less than $5 on many generic drugs. So, there's some significant savings that can be accomplished that way. There's a website, actually, called GoodRx, which allows you to search by where you live and find out different prices of medications with in your area. That can be helpful as well. Sometimes they have coupons, too, on that site.
Harjes: And if you're not taking a brand name, find out if there is a generic. That's step 1.
Campbell: Yeah, ask the question. If you've been on a certain brand of medication for a long time, there's a potential that there's going to be a generic out there.
Harjes: Right, it could have come off patent.
Campbell: Yeah. The price savings alone could be tremendous -- 80% to 90% for typical generic drugs. If you take a high-cost biologic medicine, too, you may soon be able to request a biosimilar. They're not exact replicas of those brand-name drugs, but they work very similarly to them. The FDA is getting much more willing to approve those drugs. Those could offer savings, too, I think 30% to 40%.
Harjes: Right, that's what they're estimating. You mentioned Costco. Before we totally abandon that name, I just found this out -- apparently Costco's pharmacy is open to non-members.
Campbell: Anybody can go.
Harjes: That is pretty awesome. I know for a fact that most of my family gets their prescription medications from Costco because it is significantly cheaper. And I always thought, it's because they're members. But no, anybody can go in there.
Campbell: Yeah, anybody can go in there. Call around, you can reach the pharmacies and say, "I need to get this filled, how much will it cost me?" They'll tell you. There's other things that you can do to reduce your costs of prescription drugs as well. You can get a 90-day prescriptions instead of 30 day prescriptions, which can sometimes save you money on copays. Also, if you're on a plan like mine that maybe doesn't have the best drug coverage, ask your pharmacy how much the cash price is rather than running it through your insurance. You might find that the cash price is cheaper than it would be if you run it through your insurance. I think that's a good pro tip.
Harjes: Another thing you can look into is a mail-order pharmacy -- they sometimes offer you three-month supplies for the price of one. That can be a pretty big money saver as well.
Kristine Harjes owns shares of Costco Wholesale. Todd Campbell has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool owns shares of Express Scripts. The Motley Fool recommends CVS Health. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.