October 27, 2006
A new initiative by
Wal-Mart Stores is likely to save a lot of
folks some money on their prescription drugs.
Wal-Mart announced plans to expand
its discount drug plan to 27 states. Under the program,
Wal-Mart will charge consumers just $4 for more than 300
popular generic medications. Experts predict rivals will
feel pressure to lower their prices to maintain
customers. Indeed, Target has already
Even those folks with drug
coverage through their health insurance should take note
since they could save some money, too. While every
company plan will vary, the average employer-sponsored
health plan charges a co-payment of $10 for a nonbranded
medication, according to the Kaiser Family Foundation, a
nonprofit organization that provides information and
analysis on health-care issues.
First, check to
see if you live in one of the states. If you don't,
check again soon because a Wal-Mart spokesman says the
company plans to roll out its discount program to as
many states as it can by year's end.
If you do live in one of the "discount" states,
medications against the $4 generic drug list to see
if you can save any money. What if you already
have drug coverage through your health insurer?
Typically, when you fill a prescription at a pharmacy,
you're charged the insurer's co-pay. Regardless of the
medication's cost, even if it retails for less.
Wal-Mart, however, says it will charge all of its
customers just $4 for participating remedies. Just make
sure to present your insurance card with your
prescription so the retailer can have the medication
added to your health records. (Insurance companies keep
all of your medication information together so it can
troubleshoot drug interaction issues when you fill a new
Other Low Priced Options
What if your generic isn't on Wal-Mart's list? In
general, the cheapest generics are found at wholesale
club stores, including Sam's Club and Costco. These
discounters typically charge 50% less for nonbranded
medications, says Gabriel Levitt of PharmacyChecker.com,
a web site that monitors prescription-drug costs. While
Costco doesn't currently offer one flat fee for its
prescriptions, the company says it charges just 3% over
its costs for all of its generics. Even better, you
don't need a membership card to buy your prescription
You may also be able to save money by buying your
maintenance medications through your insurer's
mail-order program, says Mohit Ghose, a spokesman for
America's Health Insurance Plans, an industry group
based in Washington, D.C. Pharmacy-benefit manager Medco,
for example, says its mail-order prices are typically
10% lower than retail. While prices will vary somewhat,
Medco's small-business members pay just $10 for a 90-day
supply of generic drugs. This is not only a slight
savings over Wal-Mart, but it also covers some 2,000
Ask for a Generic
Have a medicine cabinet full of name-brand pills? It's
time to ask your doctor for the generic equivalents.
Indeed, whenever your physician pulls out his
prescription pad, ask if there is a nonbranded version
of the same drug. (Nearly 75% of all FDA-approved drugs
are available as a generic, according to Medco.) If
there isn't a nonbranded version, see if there isn't
another comparable medication that has a generic
alternative, suggests Alwyn Cassil, spokeswoman for the
Center for Studying Health Systems Change, a nonpartisan
policy research center funded by the Robert Wood Johnson
Foundation. Often, there are a handful of medications in
the same class that offer similar therapeutic benefits.
Work Within Your Formulary
For those times when there is no generic equivalent, try
to at least get a prescription for a "preferred"
medication. These are name-brand drugs that are on a
pharmacy benefit manager's formulary (list of covered
drugs) and come at a more reasonable co-payment than a "nonpreferred"
drug. While the average co-pay for a preferred drug is
$22, the cost rises to $35 for one that's not on the
preferred list, according to the Kaiser Family
Foundation. Think of it as going to see a doctor that's
in-network vs. one's that out of your insurer's network.
Once you have the prescription it may feel like too
much of a hassle to call your doctor back and ask for a
new medication that's on the preferred list. Better to
carry a copy of your insurer's formulary with you to
every appointment. This way your physician will have it
in front of her when she is prescribing you medicine.
You can find the formulary on your insurer's web site.
Use Your Pretax Dollars
Even if you manage to successfully tap into a
discount-drug program, you can still save more through a
Flexible Savings Account (FSA). Flexible spending
accounts allow consumers to set aside pretax money for
health-care expenses, including prescription drugs.