Americans pick up hundreds of millions of prescription drug orders per year, often without examining the full price tags and instead focusing only on their after-insurance copayments. However, those who lack health insurance coverage and therefore pay full price for prescriptions are routinely given a glimpse into the manner in which Rx drugs are priced by the pharmacies and pharmaceutical companies – and that pricing scale can be eye opening.
Recently my doctor prescribed a combination of three drugs to treat a particular health issue. Two were powerful antibiotics, and the third was merely the prescription version of a common and inexpensive over the counter medication. I wasn’t shocked that the total came to more than two hundred dollars; I’d been warned by the doctor that the antibiotics might not come cheap. Glancing down at the order I saw that two of the drugs cost about $100 each, while the third was very inexpensive. But when I got home I examined the receipt more closely and learned that it was one of the antibiotics which was cheap, and that the common over the counter medicine had been one of the expensive drugs.
Returning to the pharmacy, I priced out the equivalent twelve-day over the counter dosage of this common drug and calculated that it would have cost only about ten dollars. I asked the pharmacist if there was any difference between the OTC and Rx versions, and she said they worked the same. So I asked if I could return the prescription version of this drug, which the pharmacy had just sold to me for $98 (for the generic Rx version no less), and buy the equivalent over the counter dosage instead.
The pharmacist made clear that the pharmacy doesn’t accept returns for refunds, an understandable policy considering that pills, once taken out of the store, can’t simply be returned and safely sold to the next customers; they’d have to go in the trash. Nonetheless I pointed out the absurdity of charging an uninsured cash customer $98 for ten bucks of medication. She responded by asking if I was a AAA member. I said yes, and so she refunded me a 33% discount on all three of the prescriptions.
Initially excited, I asked when this particular pharmacy had begun offering discounts to AAA members. She said they had been doing so for years. When I pointed out that I could have saved thousands of dollars in discounts over the past few years if they had informed me that AAA discounts were available, she replied “You never asked.” Apparently, I was supposed to know enough to ask whether a pharmacy offered discounts to road club members.
The exchange begs the question of just how much and how often the pharmacies and pharmaceutical companies are overpricing common drugs, assuming that customers won’t notice because the insurance coverage is skewing the full price totals. It further begs the question of whether the insurance companies are being scammed by the pharmacies, or whether the insurance companies are in on it and are kicking the overpayments back to the other side of the fence as an excuse to charge patients higher annual premiums. The fact that pharmacies can offer a one-third discount to customers for something as arbitrary and unrelated as AAA membership points to just how sky high the profit margins are on these marked-up drugs – and serves to demonstrate just how wildly priced some prescription drugs are, particularly in comparison to their over the counter equivalents.