The Food and Drug Administration approved 27 new drugs in 2013, and another 26 drugs have received the agency's go-ahead through the middle of August this year. However, many of these drugs, including Gilead's blockbuster hepatitis C drug, Sovaldi, come with increasingly higher price tags, and that is forcing patients to pay more money out of pocket as insurers rely on tiered drug formularies.
These formularies, developed by pharmacy benefit managers such as Express Scripts and CVS Caremark, are designed to save money for healthcare payers such as insurance companies UnitedHealth Group and WellPoint, but they may also create barriers for doctors and patients who want medicine prescribed that falls into a formulary's more expensive tiers. Since that is squeezing patients financially, let's look at five ways that people may be able to lower their drug costs.
1. Drugmaker deals
In order to sidestep controversy over high-priced medicine, many drugmakers offer prescription medicine at steep discounts (or sometimes for free) to patients who are struggling to pay.
For example, Gilead's "support path for Sovaldi" program aims to increase access to the drug, which costs $84,000 for 12 weeks of treatment. Although Sovaldi is covered by most insurers, for those who are uninsured, underinsured, or need financial assistance, the program offers a valuable lifeline.
Gilead's program provides access to case managers who can help patients navigate insurance obstacles. It also provides Sovaldi for free to certain patients who don't have other insurance options; for those who don't qualify to receive the drug for free, the program may provide co-payment coupons.
Of course, not every drugmaker offers such a program, and these programs are likely to vary from company to company. Regardless, their existence suggests that it might make a lot of sense to reach out to drugmakers directly regarding potential discounts.
2. Nonprofit options
More than half of all personal bankruptcies happen due to medical costs; to help avoid that risk, nonprofit agencies offer eligible patients grants so that they're not faced with skipping their medicine in order to save money.
The Patient Access Network Foundation, or PAN, is one of them. PAN is an independent nonprofit that offers co-pay assistance to eligible low-income patients. Since being founded in 2004, PAN has spent more than $700 milllion helping over 300,000 underinsured patients get their medicine.
Similarly, the nonprofit HealthWell Foundation helps eligible patients with co-payments, deductibles, and health insurance premiums. Since its founding in 2003, HealthWell has awarded more than 275,000 grants to more than 175,000 patients.
In addition to these two organizations, dozens of philanthropic organizations may offer financial assistance. Having said that, the medicines each of these will help with does vary. That means patients will need to do some legwork to determine if there's help for their particular prescription or indication, but it may prove worth the effort.
3. Another drug
Many medicines are expensive because there are few alternatives, but it may still help to discuss costs with your doctor. That's because many physicians may be unaware of your financial situation, including health insurance coverage.
Some doctors may prefer certain medications over others, but that preference doesn't mean they won't prescribe another once the issue of cost is raised.
For example, doctors may prescribe older medicines that have generic alternatives, or newer medicine that may also work and come with a friendlier price tag.
4. Bumping up insurance
People might also lower their out-of-pocket medicine costs by changing their insurance coverage to a more comprehensive plan.
While such plans come with a higher monthly premium, they can significantly reduce patient co-pays or deductibles. That means these plans can save you money in the long run, while also providing the benefit of knowing what your costs will be every month. Of course, that will depend on the specific formulary used by the new plan, so patients should ask whether their medicine is covered before signing on the dotted line.
If you're worried about whether you can change plans after being diagnosed and prescribed pricey medicine, remember that the Affordable Care Act did away with insurers' ability to price plans based on individual health. Instead, insurers must price their plans based on age, where you live, tobacco use, whether it's an individual or family plan, and the amount of coverage provided.
5. Healthier savings
Another alternative that may make sense for some patients is to establish a health savings account, or HSA.
These accounts allow people to contribute annually up to $3,300 for individuals or $6,550 for a family to a plan that can be used to help pay for prescription drugs or other eligible medical services, such as doctor visits.
In order to use an HSA, patients must be enrolled in a high-deductible insurance plan, such as the bronze or silver plans offered through the Affordable Care Act marketplace. However, not every plan can be used with an HSA, so a bit of homework will be necessary to make sure any one specific plans qualifies. Also, given that HSAs have a tax impact, a visit to an accountant may be in order before setting one up.
Fool-worthy final thoughts
The average woman spends nearly $60,000 over her lifetime on medication, but that number can jump exponentially for orphan diseases, cancer, or other chronic diseases.
Since newly approved medicines will likely continue to be increasingly expensive, patients should find that considering these and other cost-shaving opportunities will remain important.
Todd Campbell owns shares of Gilead Sciences. The Motley Fool recommends CVS Caremark, Express Scripts, Gilead Sciences, UnitedHealth Group, and WellPoint. The Motley Fool owns shares of Express Scripts, Gilead Sciences, and WellPoint. 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.