More evidence that it pays to shop around for prescription drugs

I follow the blog, run by Dr. Kevin Pho and featuring a large number of doctors and other health care professionals offering commentary, insights, and news about the delivery of health care. While a lot of the posts are not of that much interest to self-pay patients (or anyone else who isn’t a medical professional for that matter), there are some articles that are extremely relevant.

This morning I found one on the importance of not just using generic prescription drugs to save money, but to shop around because prices vary wildly from store to store. Here are a few excerpts:

Generic drugs play a central role in reining in health care spending

It was a huge relief to Carol Thompson in 2011 when her breast cancer drug Femara (letrozole) went off patent and became available in a generic version. With a high deductible in her private insurance plan, Thompson was forking over $450 for a month’s supply of the life-saving drug. After the generic hit the market she was thrilled to find letrozole available for just $11 a month at Costco. But curious to find out if she could save even more at another pharmacy, Thompson made a few calls to local chains and mail-order services to compare prices.

What she found was astonishing: prices for letrozole ranged wildly, from $450 for a month’s supply at CVS to just $14 at a local, independent drug store. Pity the person who assumes that big national chains like CVS and Target that buy generics wholesale in large quantities will naturally provide the best value. 

The author of the blog post, Naomi Fruendlich, found Thompson’s story on a recent PBS NewsHour segment that looks at several common prescription drugs and the wide variation in prices. She notes that “What 66-year-old Carol Thompson encountered in Edina, Minnesota should be an eye-opener for any of us who assume the price we pay for generic drugs is more or less the same from pharmacy to pharmacy.”

I’ve noted in the past the importance of either calling around or using some sort of online tool to compare prescription drug prices, because prices can vary substantially. Some of the online tools available include,, and Rx Pricequotes.

Fruendlich also summarizes the a previous story from Consumer Reports on generic drug price differences:

Back in May, Consumer Reports explored the generic drug price conundrum even further. Investigators called more than 200 pharmacies around the country to get prices for five blockbuster drugs that had recently gone off patent including Actos for diabetes; Lexapro, an antidepressant; Lipitor for high cholesterol; Plavix, a blood thinner; and Singulair for asthma.

“The result?,” according to the article, “A whopping difference of $749, or 447 percent, between the highest- and lowest-priced stores.” The report found that a month’s supply of generic Lexapro (the antidepressant escitalopram) cost just $7 at Costco yet $119 at RiteAid. Generic Lipitor (the cholesterol-lowering atorvastatin), was $15 at the online and $144 at Target. (see chart below) Consumer Reports’ conclusion: “Our advice if you’re looking to reduce out-of-pocket drug costs: Shop around.”

Generic Drugs chart from Consumer Reports, May 2013

(Chart is from Consumer Reports, May 2013)

Unfortunately the post’s author doesn’t seem to think much of people’s ability to shop for care. After describing Carol Thompson’s discovery of wide price variations for generic drugs, she notes “…most consumers are not or should not have to be as savvy as Thompson” and ends her piece with a mini-rant against the market for generic drugs:

All this bargain hunting and price inconsistency may sit well with conservatives who see free-market competition in healthcare as the key to lowering spending. But without transparency there is no free market — only bargains for those with the means to research prices or those lucky enough to use a nearby pharmacy that offers lower prices on generic drugs. For the millions of other Americans — many uninsured or with large deductibles — who have never considered that prices on their generic medications could vary so dramatically, the so-called free market is a sham.

I’d agree that it’s hard to have an efficient market if people don’t understand that they are in a market and need to shop for their medicines just like they might shop for food or clothes, and Lord knows I’ve harped repeatedly on the lack of price transparency (and real prices too, for that matter) in health care.

But it’s a leap to somehow say that the market is a ‘sham,’ and I don’t Fruendlich gives nearly enough credit to self-pay patients who are uninsured or have high deductible health insurance. But she is right that not enough people know about how to best shop for prescription drugs or anything else in health care, something I and hopefully the people reading this blog are trying to correct.

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