The price of prescription medications is often a key financial problem for uninsured and underinsured patients, which can greatly hamper clinical care. When the patient can't afford the drug, even the best treatment plan can fail.

The costs of many medications are rising faster than the inflation rate for the economy as a whole. One study revealed that between 2018 and 2019, the prices of half of all drugs covered by Medicare Part D rose faster than inflation; 14% of those drug prices exceeded the inflation rate by 10% or more.

Affordability is a particular problem for so-called specialty drugs — costly medications and biologics for patients with complex or chronic medical conditions such as cancer, rheumatoid arthritis, hemophilia, HIV, psoriasis, and inflammatory bowel disease. Just one dose of a specialty drug may cost hundreds or thousands of dollars. Patients may not be able to absorb the high drug costs because living with a chronic illness can make it difficult to work full time.

In 2019, the average cost of a specialty drug was $4500 per month, amounting to $54,000 a year, and many brands have undergone breathtaking price rises. For example, the cost of Revlimid (lenalidomide), a chemotherapy drug, increased from $147,413 a year in 2012 to $247,496 a year in 2017.

Even common drugs, such as insulin, are becoming less affordable. Many patients with diabetes require daily insulin injections, but the price of insulin more than doubled from 2012 to 2018, partly owing to expensive improvements.

Even insured patients may have substantial out-of-pocket drug costs. Copays are often broken up into three tiers with progressively higher costs. Tier 1 is usually reserved for generics and may require a $10 copay, but then it starts getting expensive. Tier 2 might cover brand-name drugs, with perhaps a $50 copay. Tier 3 may cover nonpreferred brand-name drugs, perhaps requiring a $75 copay.

Other out-of-pocket payments involve coinsurance or deductibles. For example, a rare brand-name drug may require a coinsurance payment of 40% of the total cost. A prescription deductible may be part of the insurer's overall deductible or a separate charge. In addition to being costly, these payment models can be very confusing, especially for patients with low health literacy.

Being unable to afford medications may prompt patients to deviate from treatment plans. Twenty-nine percent of US residents say they don't take their medications as prescribed owing to the costs, according to the Kaiser Family Foundation. These individuals did at least one of the following: took an over-the-counter medication instead (22%), did not fill a prescription (16%), or cut pills in half or skipped a dose (13%).

The uninsured often pay more for medications than the insured, which only further complicates matters. According to one calculation, the uninsured pay an average of $2456 out-of-pocket on drugs compared with $1274 for the privately insured.

Such payment discrepancies can be seen with insulin; 68% of uninsured patients are paying the full list price compared with just 9% of privately insured patients.

As insulin gets more expensive, it's no surprise that uninsured patients with diabetes tend to use older, less expensive — and less effective — versions of insulin. Or they simply cut back on insulin use, which can lead to diabetic ketoacidosis, hyperglycemic crises, and possibly death. In one survey, 1 in 4 people with diabetes admitted to having rationed insulin because of cost.

Apart from obtaining free samples from their doctors (which is discussed in the section, "Should You Hand Out Free Samples?"), patients take many steps on their own — often unbeknownst to their doctors — to get drug discounts. These include applying for copay cards from drugmakers, obtaining discount cards issued by third parties, buying drugs from Canada, and applying for free or discounted drugs from drugmakers or nonprofit foundations.

All of these methods can be beneficial, though they often come with drawbacks. Copay cards and discount cards are by far the largest source of prescription discounts — accounting for 10%-15% of all drugs sold, according to one estimate.

Copay Cards From Drugmakers

Prescription drug copay cards, issued through drug manufacturers' websites, cover all or part of the patient's copay, but they come with significant limitations. They are only available for brand-name drugs and because they cover the health insurer's copay, they are only useful to patients who have health insurance.

Although Medicare and Medicaid have barred use of copay cards, drugmakers invest a great deal of money in these cards, which are extremely popular with patients. It's estimated that pharmaceutical manufacturers spend $10 billion on copay cards, and that the cards reduce patients' out-of-pocket costs by about 70%.

Health insurers, on the other hand, dislike copay cards because these savings programs undermine insurers' drug-tier system. High copays for top-tier brand-name drugs are meant to deter their use, and eliminating the copay removes that deterrence.

Therefore, some insurers have introduced so-called "accumulator" programs, which prevent pharmacies from applying the card to the copay. Instead, money from the card goes toward the amount the insurer pays the pharmacy.

This means patients must fork over the full copay, which undoes the reason patients use the card. The prospect that members would be unhappy with accumulator programs may have discouraged many insurers from pursuing this strategy.

Copay cards can cause problems for physicians too. When a patient who has obtained a copay card asks for that drug, the doctor might decline to prescribe the drug because it isn't a good fit, resulting in an angry ­— and possibly former — patient.

Prescription Discount Cards

Prescription discount cards are in many ways the opposite of copay cards. They're available mainly to patients who lack insurance or are underinsured. Plus, they can be used for many drugs, not just brand names.

Discount cards are issued by pharmacy benefit managers (PBMs), whose usual work is negotiating drug prices on behalf of insurers. The money for these cards comes from pharmacies that have agreed to the discounts.

The PBMs negotiate discounts with each pharmacy and partner with sponsoring organizations that issue these cards. There are hundreds of card sponsors, including companies like GoodRx, Blink Health, or ScriptSave WellRx; nonprofits like AARP or the National Kidney Foundation; as well as many county and state governments. In addition, Amazon and entities like Physicians' Desk Reference issue prescription discount cards.

Patients obtain the card or download an app — usually for free — on the sponsor's website and take it to the pharmacy. In addition to granting the discount, the pharmacy pays the card sponsor a transaction fee of several dollars each time the drug is purchased, and that fee is shared with the PBM.

Pharmacy chains have responded to this phenomenon by issuing their own cards. Walgreens and CVS offer drug discount cards, as do the pharmacies at Walmart, Target, Costco, and grocery chains like Kroger and Publix.

Each card provides a different set of savings, which varies depending on the pharmacy, so it is worthwhile to shop around. The card companies typically advertise savings of as much as 80%, without providing more details. The Physicians' Desk Reference card is an exception, reporting average savings of 38% — or 25%-75% savings on generics and 5%-20% savings on brand names.

For a few drugs, the savings can be astoundingly high. The Washington Post reported that a medication for in vitro fertilization cost $734 at a local pharmacy, but only $30 at a nearby pharmacy when the card holder used a GoodRx card.

Drugs From Canada

Another way to cut the cost of medications is to order them by mail from Canadian pharmacies, which charge up to 88% less than pharmacies in the States. It is estimated that more than 2 million US residents purchase prescription drugs online from foreign sources.

However, purchasing drugs from abroad is illegal and, in some cases, these drugs have proven to be counterfeit. One study found that most so-called Canadian drug sites actually sell drugs from India, Turkey, Southeast Asia, and other places where there is less regulation.

These websites flourish because US authorities have refrained from prosecuting the sites' owners and because legalization may be just around the corner. The Trump administration issued a rule to legalize the sale of most drugs from Canada; the Biden administration upheld it, but the pharmaceutical industry is still fighting the rule in court. If enacted, the rule would allow each state to determine which drugs can be imported.

Patient Assistance Programs and Foundations

In addition to providing free samples and copay cards, each pharmaceutical company maintains a patient assistance program (PAP), which enables patients to apply for free or discounted drugs. PAPs are said to be particularly useful for expensive medications such as atypical antipsychotics, antidepressants, angiotensin receptor blockers, and thiazolidinediones.

However, it can be difficult to qualify for these programs. Patients must fill out forms and prove financial need. In many cases, little is known about exact eligibility criteria or the chances of being helped. A study of PAPs found that only 4% disclosed how many patients they had helped, and half did not disclose their income eligibility criteria.

Not-for-profit foundations occasionally help patients purchase prescription drugs. Here, too, patients must also prove financial need and, not surprisingly, funds are often limited.

For example, the PAN Foundation provides 12-month grants covering out-of-pocket medication costs; Rx Outreach helps patients whose income is 300% below the federal poverty level; the National Council on Aging pays for prescription drugs of low-income seniors and people with certain chronic conditions; and the Patient Access Network Foundation and Patient Services Incorporated offer drug copay assistance.

Understanding patients' struggles to reduce drug expenses can help doctors come up with more affordable — and thus more effective — drug regimens.

Physicians traditionally have been unable to make even ballpark estimates regarding how much their most commonly prescribed medications cost. In a study regarding the cost of therapeutic services, only 31% of physicians came within 20%-25% of the right figure.

Today, electronic health record systems show typical prices for many drugs. Doctors can also go to health insurers' websites to discern prices that have been negotiated by that insurer (actually, by its contracted PBM) with the drugmaker. Many doctors, however, don't consult these price lists. In 2019, for example, fewer than 10% of physicians were using Humana's drug pricing tool, which had been introduced 4 years earlier.

Admittedly, some drug pricing tools are missing — or list significantly incorrect — figures owing to the need to keep certain prices confidential to prevent rival companies from using them in price negotiations. With a little extra effort though, doctors or their staff can elicit fairly accurate prices from a mix of sources, including websites like Drugs.com, GoodRx, and RxAssist.

These figures may not be the exact prices your patients will pay, but they're close in most cases. Using these sources, you may want to draw up a list of estimated prices of the most frequently prescribed drugs in your practice.

Identify Patients Who Are Struggling With Drug Costs

As discussed in Chapter 4, you shouldn't expect patients to approach you with their cost concerns. You and your staff should routinely ask patients whether they're having difficulty paying for their medications. Again, try not to sound accusatory when doing this.

Once you've established a relationship with the patient, you can start making shared decisions regarding a medication regimen that works both clinically and financially. As the physician, you can teach the patient about clinical issues, such as the need for current medications and the appropriateness of generic substitutes.

Remove Unnecessary Meds

No longer prescribing certain medications can effectively lower drug costs. This action, called deprescribing, is often necessary for older patients, who have high incidences of polypharmacy. According to an American Family Physician article written by pharmacists, nearly half of US residents over the age of 65 take five or more medications, and as many as 1 in 5 of these prescriptions may be inappropriate.

Patients who stop taking medications because of costs may ironically end up with too many drugs because physicians then prescribe extra medications.

If a patient's health status has changed, the potential for harm may outweigh a medication's benefit. Also, many patients spend money on treatments of dubious value, such as herbs, vitamins, and complementary treatments. Encouraging patients to abandon these treatments could be in their best interest.

Are Generic Drugs the Answer?

Helping patients switch to generic drugs is an obvious way to reduce costs. In some cases, an expensive brand-name drug costs as little as $5 as a generic. Also, whereas the prices of brand-name drugs often soar, generic drug prices have been falling.

Occasionally, however, the generic substitute may harm the patient. Though generics have the same active ingredients as brand names, there may be important differences, such as taking longer to be absorbed by the body.

These problems do not apply to most generic medications, according to a wide-ranging review of generics in the Journal of Family Practice . Moreover, it has been shown that patients who are taking generic drugs are more likely to continue therapy than those who are taking brand-name medications.

As patents on brand-name medications expire, more generics are coming to market. In 2020 alone, the US Food and Drug Administration approved 72 new generic drugs.

Should You Hand Out Free Samples?

One common means of reducing drug expenses for patients is to give them free samples of brand-name drugs that are obtained from drug company representatives. Over half of pharmaceutical companies' average budget is spent on samples because they're great marketing tools.

However, there is evidence that some samples are inappropriate for the patient's condition. Moreover, the newest, most expensive samples may not help patients who are financially strapped. For these reasons, some hospital systems have banned handing out free samples.

Although free samples may offer an acceptable temporary solution for patients who have financial burdens, it's important to simultaneously look for a long-term solution.

You can have your staff help uninsured or underinsured patients fill out forms to:

• Obtain free or discounted drugs from PAPs or foundations;

• Request that an insurer waive the copay for a high-tier drug; or

• Benefit from a hospital's medication-related charity care policy.

Staff also can help patients who have Medicare enroll in Medicare Part D, which covers drugs, or help patients with private insurance switch to a plan with better drug coverage.

Small practices, of course, might not have a large enough workforce to assign staff to these time-consuming activities. Larger organizations, however, often require staff to do this work and in some cases, the staff calls in medication access specialists to work with patients who have high-cost specialty medications, such as chemotherapy drugs.

Conclusion

The high cost of prescription drugs is a fundamental reason why the uninsured and underinsured can't afford healthcare. Drugs are therefore a good place to start when you're looking for ways to reduce these patients' cost burdens.

It is important to be aware of the costs of the drugs you prescribe, and what your patients may be doing to dodge those costs, such as forgoing critical medications, using copay cards, getting discounts at pharmacies, or buying questionable drugs from abroad.

You can reduce patients' expenses by removing unnecessary medications, prescribing generics when appropriate, and helping patients apply for free drugs from drug manufacturers and not-for-profit foundations.