Minimizing Your Prescription Drug Costs

Americans spend over $150 billion per year on prescriptiondrugs. The average American gets 10 prescriptions per year, andover 10% of their total healthcare expenses are forprescriptions. Starting in 2006, no plans that are qualified towork with health savingsaccounts may cover prescription drugs as an insured benefituntil after the deductible is met. So for HSA owners, one ofyour biggest health expenses could be for prescription drugs.Here are some ways to reduce those costs. GenericsA report was published this week by Express Scripts Inc., apharmacy benefit manager, indicating that increased use ofgeneric drugs would save consumers $24 billion in 2005. Genericdrugs cost an average of $60 less per month, than brand namedrugs. It is important to understand that brand name drugs often havelittle or no benefit over older generic versions. A primeexample is Prilosec, a heartburn medication whose patent wasscheduled to expire in April of 2001. Prilosec consists of two"isomers", a right-hand version and a left hand version. Studiesshowed an 87% success rate for this drug. AstraZeneca, themanufacturer, decided to offer a newly patented single isomerversion called Nexium, which showed only fractionally betterresults with a 90% success rate.A $500 million marketing campaign ensued, aimed at bothphysicians and consumers, to convince them that Nexium is"state-of-the-art". AstraZeneca now sells over $3 billion worthof pills annually, at $120 per box. This is a drug that isessentially only a repackaged version Prilosec, which sells forabout $20 per box.When your doctor is prescribing a drug, make sure to ask him ifthere is any benefit to taking a brand name over a generic, andlet it be known that you'll be paying for the prescription outof your own pocket.Drug Discount ProgramsPharmaceutical prices are a lot like hospital prices - very fewpeople actually pay the listed retail price. There are numerousdrug discount cards available on the market, which providesavings that average 15% to 40% below retail at participatingpharmacies. Typically, most of the chain pharmacies (CVS,Eckerd, Walmart, Kroger, Costco, etc.) participate in theseplans. Many insurance companies include discount cards as an additionalbenefit that comes with their coverage. Because these cards arenot considered to be insurance, they can be offered with anHSA-qualified plan. Insurance companies that provide Rx discountcards with their HSA plans include American Medical Security,Anthem Blue Cross Blue Shield, Assurant, Golden Rule, Imerica,Unicare, and World. We also know of one HSA administrator - HSATrustee Services - that provides a drug discount program topeople who use them. Stand-alone drug discount plans are also available to anyonewith access to the internet. We've found the average cost ofthese discount plans to be around $7 or $8 a month. HSA forAmerica has secured for its members (and readers of thisnewsletter) a free discount Rx card through a company calledDrug Card America. To enroll online, simply visit:http://drugcardamerica.com/index.aspx?affid=104&agent=1&rxgrp=SAS104&affguid={458151a2-8511-4e15-! 9c22-d335be23527c}. You maywant this card in addition to any other cards, since the cardthat offers the best deal usually varies, depending on the drug. If you're looking for a plan that has co-pays for prescriptiondrugs rather than only discounts, American Health Care Optionsoffers a four-tiered prescription card program where you pay$10, $20, $50, or a special discount price for generic and brandname drugs. You can check the tier of any drug you're interestedin, and apply online at http://www.ahco.biz/index.cfm?id=14593.The cost of this plan is $19.95 per month for an individual, or$29.95 for a family. Mail OrderIf the need for a prescription is not urgent, or if you are onlong-term medication, mail order is almost always a lessexpensive way to buy prescription drugs. It is generally cheaperto get a 90-day supply because of a volume discount. I recommendasking your physician to write the prescription for a 3-monthlysupply plus three refills. This will get you a year's worth ofdrugs, with only one shipping fee.One company that has good prices is Save Now Discount Pharmacy.They have a 'no insurance' business model, and have been able toreduce their prices by eliminating the cost of dealing withinsurance companies. They also post prices online, so it's easyto compare. Unfortunately, they are only licensed in 13 statesat present, but they will apparently be expanding soon. You cancheck them out at www.savenowdrugs.com.Importing Prescription Drugs from Canada (or wherever)The city of Boston, the city of San Francisco, the state ofWisconsin, and the State of Minnesota all use a company calledTotal Pharmacy Care to give their citizens access tointernational mail-order pharmaceuticals. Officially, re-importation of prescription drugs by anyone otherthan the drug's manufacturer is a violation of federal law. ButFDA enforcement guidelines allow agents to exercise discretionfor drugs imported for personal use. According to theguidelines, "FDA personnel may consider a more permissivepolicy" in cases where an individual seeks to import no morethan a three month supply of a product that does not appear topose an unreasonable risk, if the individual affirms in writingthat it is for personal use and provides the name and address ofthe U.S. doctor supervising their treatment. Advocacy groups cite these guidelines as proof thatre-importation is legal. But in a February 2003 letter, theFDA's Associate Commissioner, Thomas Hubbard, said theguidelines have been misinterpreted. They were meant to allowFDA agents discretion in allowing U.S. citizens access tomedicines for serious conditions that were unavailable or hardto find in the states, not to allow international comparisonprice shopping.Nevertheless, thousands of U.S. citizens have found they cansave money by buying their drugs from outside the country. Drugprice comparisons from several countries (Canada is not alwaysthe cheapest!) can be found athttp://www.crossborderpharmacy.com/Total-Care-Pharmacy/totalcarepharmacy.html. Keep in mind that since this importation istechnically illegal (though rarely enforced), it may not beproper to use your HSA to pay for prescriptions purchased thisway. Talk to your accountant if you decide to go this route.Avoiding Prescription DrugsThe people who spend the least on prescription drugs are thosewho rarely take them. The need to take an antibiotic for anacute infection may seem fairly expensive, but it is nothingcompared to the cost of taking a medication for the rest of yourlife. Unfortunately, by age 45 over half of all Americans are ona regular prescription medication, and by age 65 nearly half areon three or more prescriptions during any given month. Most ofthis is entirely preventable.Some of the biggest selling drugs are to treat elevatedcholesterol, hypertension, and acid reflux. A paper publishedthis year in the American Journal of Clinical Nutrition entitledOrigins and evolution of the western diet: Health implicationsfor the 21st century, explains how these and other common healthissues did not exist for our hunter-gatherer ancestors, and howdiet is the root cause of so many of the health problems peoplein our culture experience. The author is Dr. Loren Cordain, one of my professors atColorado State University. In a nutshell, he shows why thehealthiest diet is one based on fruits, vegetables, fish, andlean meat. Foods to be avoided or limited include added sugars,shortening and other processed vegetable oils, grains, andlegumes. These are all foods that did not exist in our dietprior to about 10,000 years ago, and are thus foods that we arenot genetically adapted to eat. If you're interested, you candownload a copy of this paper at:http://www.thepaleodiet.com/published_research/. Remember that all qualified expenses, including prescriptiondrugs, can be paid for tax-free, from your HSA. If you've stillgot a traditional health insurance policy and would like toinvestigate a health savings account, please visit HSA forAmerica us and we'll be happy to help you. To your health and wealth, Wiley LongPresidentHSA forAmerica