Paying Cash is Cheaper than Insurance?

A recent article in the Pittsburgh Post-Gazette had the story where a man was told that his cough syrup would cost $91 under his insurance plan but but that he could buy the same drug for only $26.10 if he paid cash. Experts say that many factors play into pharmaceutical pricing.  Plus, with the addition of Prescription Discount Savings Plans like the card from CapitolRX, you never have to pay full price again!

According to the story, Charles “Chuck” Conn stopped in to see his local pharmacist a couple of weeks ago to fill a prescription for a cough that had persisted for a month. Once he saw how much the medication cost, he could have used a side order of blood pressure pills. The price, under his insurance plan, was $91 for 30 non-narcotic Benzonatate gel caps.  I told him, ‘I’m not paying it,’” the Baldwin resident said.

Ninety-one dollars isn’t the most expensive prescription medication sold in a pharmacy, but for a retiree on a fixed income, it’s not a payout to be taken lightly.  Luckily, the pharmacist was able to use a series of available discounts and was able to sell the medication for $26.10 in cash.Charles

Mr. Conn, 66, happily paid the lower price but the episode left him wondering: Why would a prescription cost nearly four times more through his insurance plan than paying cash?

The answer may lie in the many levels of pharmaceutical pricing, which include the wholesale prices that hardly anyone pays and the largely unseen influence of third-party pharmacy benefit managers.

In Mr. Conn’s case, there was an immediate hurdle he didn’t recognize at first: Medicare Part D, the prescription drug coverage for seniors, does not cover cough suppressants, and Benzonatate was not in his plan’s formulary of covered medicines. That meant he could not take advantage of any discount negotiated by his insurer.

That still didn’t explain why the gel caps cost much more through his insuranceThe pharmacist at Mr. Conn’s pharmacy said it probably has to do with a price set by the wholesaler that is rarely charged to the patient. “I can’t even tell you what goes into setting that price,” he said, adding that usually, most pharmacists “would have managed that down” to a lower price or, absent that, charged a lower price anyway. “With most pharmacists, the price is a courtesy. There is some compassion,” he said.

His advice: Check ahead to see if a new medication is covered under your insurance; information is generally available on your plan's website. Or ask to speak to a pharmacist if the price seems high; and, if practical, shop around if you’re unhappy with a pharmacy’s price. "No one sees exactly how much the [Medicare] Part D plan is billing the government,” a pharmacist said in a phone interview. “A lot of pharmacists believe that the government is paying far more than they need to.”

Mr. Conn, the retired chief engineer , said the Benzonatate cleared his cough in three to four days and he’s doing well now. Looking back, his wife, Christine, said the couple is still “flabbergasted” by the price difference and now wonder if they should be asking for the cash price every time.

Our advice, here at CapitolRX, is to carry the discount card and then do the research. Talk to the pharmacist, see where you get the best savings, and then decide.  It's your money, you should get to decide how to spend it.

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