Crazy American Drug Pricing (and How to Beat It)

Want to get your meds at 95% off list price? The price you would pay would be substantially less than most co-pays, including Medicare.

Would you like to have a Tesla or a BMW for 95% off? Sorry, can’t help you there. However, consider this: I made the following purchases for myself and various family members over the last three months:

Name of Drug List Price What I paid Discount
Escitalopram (Lexapro generic) 20mg 90 pills $540 $18.50 96%
Dutasteride (Avodart generic) 0.5mg, 90 pills $526 $36.00 93%
Eszopiclone (Lunesta generic) 3mg, 30 pills $332 $22.88 93%
Anastrozole (Arimidex generic) 1mg, 90 pills $531 $23.22 96%

You are probably very suspicious, thinking they are expired drugs, or perhaps stolen, or ordered from a very suspicious online source, or obtained from a very suspicious character in some dark alley, or something of that ilk. Not at all. They are no different those that Walgreens, CVS, or Rite Aid would dispense. I will get to “how” in a minute, but first a minor disclaimer:

List price is the highest you would every pay for a drug. By law, Medicare prices cannot exceed the lowest price charged. This is typically around half list price. This would still be far higher than the prices I paid for these drugs.

How to get the low prices

Go online and Google “drug coupons.” You will get a bunch of ads. Ignore those and go on to the coupon sites. I use, but there are many more and all seem to have the same deals. Print the coupon; take it with the prescription (or have it phoned in) to the pharmacy offering the deal—Safeway in my case and pick up the med in question. When they ask about insurance, I say that I am paying cash. The copay for Medicare is 25%. Many other health plans are similar. This is several times higher than the coupon price I am going to pay.

Why this huge price difference?

I have no proof of this, so it is speculation on my part. However, I would be astonished if it were wrong.

Go back and read this post, wherein the customer is charged list price and pays a percentage of that as copay, typically 20%-25%. However, as that post details, behind the scenes, the insurance company pays far less, and all sorts of kickbacks go back and forth to everyone involved except the patient (you). This is not some sort of nut-job conspiracy theory. This is actually how it works in America. Read the post and the material it references if unconvinced. The companies that manage the kickbacks are called Pharmacy Benefit Managers. Never head of them? They would prefer it that way. The largest of them is Express Scripts, #22 in the US, with over $100 billion in revenue. Not bad for simply managing who gets your drug money. But I digress.

Now in my above purchase examples, you will note that the cost of the drug with the coupon is far less than even the copay.

So the conclusion is that the list prices are high for one reason and one reason only: to extract more copay money from the patient.

Got a better explanation? I would love to hear it. I know of no other widely purchased product category where the price can vary 20:1 for the identical item.

So why the coupons?

Not sure. The people offering the coupon discounts are not the traditional drugstores, though they are well known, perfectly trustworthy outfits. Can these “mavericks” play in the kickback scheme? I don’t know. Lets hope not. Anyway, these heavy discounters are the grocery stores: Safeway, Krogers, and the big-box stores: Costco, Walmart, Target, etc. These companies are trying to bust into the pharmacy business. The traditional drugstores also have discount coupons, and these also show up on the drug coupon sites. However, they are not offering a 95% discount typically. It is more like 50%-60%. This is probably around the Medicare price.

Couple of other items

I do not know how this super-low coupon pricing plays with insurance. I avoid the topic when I buy since my copay would be a lot higher. If anyone tries this one out, let the rest of us know how it went.

Sometime the drugstore coupons are a better deal. Pays to shop (surf) around. The infamous Epipen is a good example. After the Mylan monopoly, the price jumped from $150/pair to $600, and after grand public outcry, the list price got reduced to $300—still highway robbery IMHO. With the coupons, a pair of Epipens can be gotten at the usual drugstores for around $150. The supermarkets and big-boxes are higher. (Cost in England, around $70.)

What about Cialis, Viagra, etc.

There is no generic Cialis (tadalafil) yet in the US, so it is very pricey (30 5mg pill, $400), unfortunately, the coupons only reduce the price around 25%. The only ways to get a better discount are by going Canadian or through abstention.

Viagra is a different story. The Viagra list price for 30 25mg pills is around $2300 (ouch!), the generic (sildenafil) lists at $550. These can be gotten for $16.25, a 97% discount, the highest discount we have found yet.

You can get cheap Cialis by going Canadian. A reputable such Canadian pharmacy I have used (before the coupons appeared) sells the generic for about a fourth the price as the branded item costs here. So 30 5 mg generics would cost a little over $100. Other Canadian pharmacies offer this drug at far lower prices. I went for one of these deals once. The pills I got were generic, of course, but instead of a two-years out expiration date, it was more like 8 months.

Let your friends know. That 20% copay, which seems so reasonable, is actually a scam. For most of the pricey drugs, the coupons end-run this by a large margin.

The drug-insurance-pharmacy kickback contraption. Note that the money flow is in and out of all boxes except one, yours.

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