Who pays for the discount offered by the drug discount cards? If you have ever used a discount card or coupon at your pharmacy to save money on your medications, you are probably asking the same question. How is this possible? You normally pay $50 for your amlodipine but now with your HelpRx or Community Assistance drug discount card, your price is now $12. Somebody must be providing this charity right? The answer is no. Prescription drug discount card is not a charity but a business practice that benefits all participating parties.
To explain how this works, it will be necessary to list all the participating parties in transaction that takes place at pharmacy. First is the patient. When a medication is prescribed to a patient without prescription drug insurance, the patient is left with many dilemmas. Pay the high price of the medication and sacrifice elsewhere, skip the medications all together because of the price, or something in between like buy some of the pills and take it as needed. As a patient in chain pharmacy like CVS or Walgreens, you can’t haggle on price because they don’t have a provision for that. You either accept the high cash price they quote you or leave. It is that simple. But with Rx discount cards; there is a way out for both parties.
Pharmacy is the next participant in the transaction. Pharmacies are in business to make money. That is there goal. Loosing patient who can’t afford their medications or not taking their medications as prescribe because of price is not good business either. So how can they offer help to people that need the help without cannibalizing their bottom line? Answer is drug discount card.
So how does it work? Most of the big savings scored with drug discount cards are generally generic medications because of their large profit margin. Contrary to popular belief, prescription generic medications are cheap, dirty cheap. Drug Insurance companies pay pharmacy really low price for medication because of the volume of their patient but cash paying patients are charged extra ordinary high price. By PBM ( drug insurance company) offering this discount card, patients using the card will benefit from the cloud of many patients using the same card. In order words, it pays to stick together.
Pharmacies across the country will accept this because, 1) first they are used to getting less from the PBM, 2) It is not good business to lose patient you can make profit from, even though it is not as much as what it could have been.
It is a win – win situation for all the parties involved. The patient who finds and uses a drug discount gets to save money and be able to take his or her medication as prescribed by the doctor. The pharmacy makes a sale but most importantly gained a patient who will over the course of years be a repeat customer. The PBM also benefit because they are paid by the pharmacies for electronic transaction fee for transmitting claims online. Although this might be minor, it can add up pretty fast. The PBM also benefit by having more people using their network, this will strength their hand in negotiating new contracts with pharmacy chains.
Now that you know how drug discount works, how come everyone that doesn’t have drug coverage is not using it? In order for pharmacies to accept these discount cards, they place certain limitations on it. First is no distribution of cards around pharmacy premises, giving out cards in the pharmacy will erase patients willing and capable of paying the full high price of the medication. Secondly, the advertisements of these cards are limited in scope. No mass media campaign like radio or TV but print ads are ok. So with these limitations, patients that don’t bother looking will continue to pay high cost while patients that really want to save money on their medication will have a choice.