D.C. Isn’t Lowering Drug Costs… Here’s What You Can Do

Marc Lichtenfeld By Marc Lichtenfeld
Chief Income Strategist, The Oxford Club

Market Trends

One of President Trump’s campaign promises was that he would lower the price of drugs.

That hasn’t happened. And considering that his new choice for secretary of health and human resources is a former Big Pharma executive, it’s not likely to happen in the future either.

It’s no secret that drug prices have been skyrocketing.

This year, drug prices are projected to rise 11.6% – even more than last year’s 11.3% rate.

And here’s a chart of the average annual cost of 214 brand-name drugs most widely used by older Americans for chronic conditions…

From $1,788 to $5,807!

During the same period, the cumulative inflation rate was 19.4%. That means the $1,788 seniors paid in 2006 should have cost $2,134 in 2015, not $5,807.

If that doesn’t make your blood boil, someone should check to see if you’re still breathing.

One thing the president has done is appoint a Food and Drug Administration chief who is committed to getting generic drugs on the market more quickly. Generic drugs can cost a fraction of the price of their branded peers.

If you’re getting squeezed by high drug prices, there are a few things you can do.

  • Generic Drugs – If your medication cost is high, ask your doctor if there is a cheaper alternative. Occasionally, there is a valid reason why your doctor will prescribe the more expensive branded one. But often, a generic will work just as well.
  • Mail-Order Pharmacies – I still remember the days when people knew their pharmacists. Importantly, their pharmacists knew them. They knew what drugs you were taking and why, and they could make recommendations based on that knowledge.

But the days of the local neighborhood drugstore are mostly gone. You’re more likely to have your prescriptions filled at Walmart, Walgreens, CVS or even your supermarket.

If you’re not getting that personal touch anyway, then who cares where you get your medicine? Consider mail-order pharmacies, which are usually cheaper. You can often get a 90-day supply, which helps lower the cost too. Check with your employer or insurance company to see if there is a preferred mail-order pharmacy to go to for the best prices.

  • GoodRx – This free service allows you to comparison shop for prices among pharmacies in your area, including mail-order options. Drug prices can vary wildly from store to store, even in the same town.

For example, if you are taking Jardiance for Type 2 diabetes and live in Pittsburgh, Pennsylvania, the average cost for 30 tablets is $536. But you can find it at Sam’s Club for $352. That’s a heck of a difference.

Even generic drugs will vary in price. If you’re in Auburn, Alabama, and take escitalopram, which is generic Lexapro, used to treat depression, you can get a monthly supply for free at Sam’s Club, for $9.90 per month with an online pharmacy or for $10.85 at Kroger with a GoodRx coupon. The average price in that market is $102.

GoodRx is free to use, you don’t have to sign up or provide any personal information, and it has an app you can use as soon as your doctor hands you the prescription.

Maybe D.C. politicians will fulfill their promise. (I’ll wait for you to stop laughing.)

Until they do, there are steps you can take to lower your drug costs.

What have you done to reduce the cost of your medicine? Let everyone know by leaving the details in the comments section.

Good investing,

Marc

P.S. I recently discovered a “Prescription Reimbursement Plan” that could help put an extra $10,345 in your pocket. To see my latest research about it, click here now.