Prescription costs
Encyclopedia
Prescription costs are a common health care cost for many people and also the source of considerable economic hardship for some. These costs are sometimes referred to as out-of-pocket prescription costs, since for those with insurance, the total cost of their prescriptions may include expenses covered by a third party, such as an insurance company, as well as the individual. Out-of-pocket prescription costs include deductibles, co-payments, and upper limits in coverage.
A substantial body of evidence has documented the association between high out-of-pocket costs and many types of economic and non-economic hardship. Between 20%–30% of patients in the United States report having skipped or stretched a prescription medicine during the previous 12 months because of the cost. Other patients report cutting back on payments for their utilities or food in order to afford their prescription medicines.
There are several barriers that prevent greater patient-provider communication about these costs. Patients may be embarrassed to raise their concerns, concerned that doing so may compromise their quality of care, or under the impression that there is nothing that their health care provider can do to help. Providers may also be embarrassed discussing costs, and feel too much time pressure to discuss these costs with patients.
get prescriptions partly or totally paid for by National Insurance
from the National Health Service
. In England
prescribed medicines and medical supplies are free of charge to:
For others each prescribed item, regardless of nature or quantity, costs UK £7.40 (Increased from £7.20 1/3/2011). A prescription pre-payment certificate (or PPC) can be bought for UK £104.00, and covers unlimited prescriptions for 12 months. Alternatively, 3 monthly PPCs may be bought for UK £28.25 (Prices as at February 2010). PPCs are sold to the public by the NHS Business Services Authority
.
Other forms of health insurance
and private medical care are available, but low income does not prevent access to medical care for most conditions.
to provide drugs at low cost, either supplied by manufacturers who own the drugs, or manufactured locally as generic versions of drugs
which are elsewhere protected by patent
. Countries without manufacturing capability may import such generics.
The legal framework regarding generic versions of patented drugs is formalised in the Doha Declaration
on Trade-Related Aspects of Intellectual Property Rights and later agreements.
Pill splitting
Many pill-form drugs are produced in several different dosages. For example, a medicine may be prescribed at a 25 mg or a 50 mg dose. Some medicines can be prescribed at a higher dose and then the tablets can be split into two or more parts. High-dose pill are often much cheaper per unit weight than their low-dose counterparts. Not all pills can be split, since some come as time release capsules or require very precise dosing.
Generic drugs
Generic drug
s are much less expensive than brand-name drugs. Many people think that generics are less effective or less safe than a brand name drug, but this is an error. Once a drug is developed, it is protected by patent
and sold as a brand name drug for several years, and can be sold as a generic drug or under a different brand when the patent expires.
90-day supply
Some drugs are available in a three-month supply at a lower unit cost
than a smaller supply.
Stopping medicines that may no longer be needed
Taking a prescription medicine may become so routine that patients continue to take it even when it is no longer necessary. However, many medicines may not be needed indefinitely.
Buying from cheaper supplier
Different suppliers may have different prices. There are several government and commercial websites that will compare the prices for a given dosage of a given medication at different pharmacies.
In the USA Wal-Mart
has introduced a range of "hundreds" of prescription drugs at a uniform price of US$4 for a 30-day supply. Target
followed suit in some locations soon after Wal-Mart. In 2008 Dominick's
also began to provide prescription drugs for four dollars. Many other chains have followed their lead, including CVS and Sams Club(owned by walmart). Most chains in the USA now offer some sort of discount plan. This is usually in the form of a special price list, a loyalty discount program, or price matching of other competitors schemes. Prescription pricing has become extremely competitive, with such discounts often resulting in a charge lower than the copay through a patients insurance.
Counterfeit medications
There are many counterfeit medicines on the market, posing as both generic and proprietary brands. The counterfeits may be less effective than the real drug, or may have no active ingredients at all. This is a particular problem in countries with poor supervision of the pharmaceutical sector, which often also have many inhabitants with low incomes. Medicines bought over the Internet
are also often found to be counterfeit. This can make saving on prescription costs risky.
Research regarding out-of-pocket prescription costs
While there are many mechanisms for reducing out-of-pocket prescription costs, pharmaceutical samples actually do not reduce prescription costs. Even after receiving samples, sample recipients remain disproportionately burdened by prescription costs.
For many drugs, especially brand-name antihypertensive fixed-dose medications, the clinical benefits must be balanced with patient financial burden and nonadherence during prescribing.
A study has been done on the cost effectiveness of purchasing a three-month supply, which finds that there is a quantitative cost difference when patients in the U.S. fill larger quantities of a prescription drug for a chronic condition.
Another way to perhaps reduce out-of-pocket costs is to improve physicians' access to health information technology. While physicians with high rates of IT use do not significantly higher knowledge of drug costs, it has been suggested that health IT should be improved to make it easier for physicians to access cost information at the point of care.
United States
In the period 1994–2004 prescription costs were the most rapidly increasing cost of health care in the United States. These increases, which averaged 12% during some years, are accounted for by increases in the number of drugs per person (treatment intensification), increases in the cost of a “market-basket” of drugs (price inflation), and increases in the use of newer drugs over older, less costly, alternatives. Overall, experts estimate that treatment intensification increased by 68% and price inflation increased by 8.3% between 1994 and 2004.A substantial body of evidence has documented the association between high out-of-pocket costs and many types of economic and non-economic hardship. Between 20%–30% of patients in the United States report having skipped or stretched a prescription medicine during the previous 12 months because of the cost. Other patients report cutting back on payments for their utilities or food in order to afford their prescription medicines.
There are several barriers that prevent greater patient-provider communication about these costs. Patients may be embarrassed to raise their concerns, concerned that doing so may compromise their quality of care, or under the impression that there is nothing that their health care provider can do to help. Providers may also be embarrassed discussing costs, and feel too much time pressure to discuss these costs with patients.
United Kingdom
A very large number of people in the countries of the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
get prescriptions partly or totally paid for by National Insurance
National Insurance
National Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
from the National Health Service
National Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
. In England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
prescribed medicines and medical supplies are free of charge to:
- those under 16 years old;
- those aged 16–18 in full-time education;
- those aged 60 or over;
- holders of a valid Medical Exemption Certificate for a number of chronic conditions such as diabetes, epilepsy, etc.;
- holders of a Maternity Exemption Certificate;
- holders of an HC2 certificate (awarded on the basis of low income);
- those with a War Pension Exemption Certificate;
- recipients of income related benefits including: Pension Credit, Income Based Job Seekers Allowance and Income Support.
For others each prescribed item, regardless of nature or quantity, costs UK £7.40 (Increased from £7.20 1/3/2011). A prescription pre-payment certificate (or PPC) can be bought for UK £104.00, and covers unlimited prescriptions for 12 months. Alternatively, 3 monthly PPCs may be bought for UK £28.25 (Prices as at February 2010). PPCs are sold to the public by the NHS Business Services Authority
NHS Business Services Authority
The NHS Business Services Authority is a special health authority of the National Health Service in England and Wales. It was created on 1 October 2005 following a review by the Department of Health of its "arm's length bodies". It began operating on 1 April 2006, bringing together five...
.
Other forms of health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
and private medical care are available, but low income does not prevent access to medical care for most conditions.
Countries where the cost of drugs is prohibitive
In many developing countries the cost of proprietary drugs is beyond the reach of the majority of the population. There have been attempts both by international agreements and by pharmaceutical companiesPharmaceutical company
The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices...
to provide drugs at low cost, either supplied by manufacturers who own the drugs, or manufactured locally as generic versions of drugs
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
which are elsewhere protected by patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
. Countries without manufacturing capability may import such generics.
The legal framework regarding generic versions of patented drugs is formalised in the Doha Declaration
Doha Declaration
The November 2001 Doha Declaration on the TRIPS Agreement and Public Health was adopted by the WTO Ministerial Conference of 2001 in Doha on November 14, 2001...
on Trade-Related Aspects of Intellectual Property Rights and later agreements.
Techniques to reduce costs
Ways to Reduce Prescription CostsPill splitting
Many pill-form drugs are produced in several different dosages. For example, a medicine may be prescribed at a 25 mg or a 50 mg dose. Some medicines can be prescribed at a higher dose and then the tablets can be split into two or more parts. High-dose pill are often much cheaper per unit weight than their low-dose counterparts. Not all pills can be split, since some come as time release capsules or require very precise dosing.
Generic drugs
Generic drug
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
s are much less expensive than brand-name drugs. Many people think that generics are less effective or less safe than a brand name drug, but this is an error. Once a drug is developed, it is protected by patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
and sold as a brand name drug for several years, and can be sold as a generic drug or under a different brand when the patent expires.
90-day supply
Some drugs are available in a three-month supply at a lower unit cost
Unit cost
The unit cost of a product is the cost per standard unit supplied, which may be a single sample or a container of a given number. When purchasing more than a single unit, the total cost will increase with the number of units, but it is common for the unit cost to decrease as quantity is increased...
than a smaller supply.
Stopping medicines that may no longer be needed
Taking a prescription medicine may become so routine that patients continue to take it even when it is no longer necessary. However, many medicines may not be needed indefinitely.
Buying from cheaper supplier
Different suppliers may have different prices. There are several government and commercial websites that will compare the prices for a given dosage of a given medication at different pharmacies.
In the USA Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
has introduced a range of "hundreds" of prescription drugs at a uniform price of US$4 for a 30-day supply. Target
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
followed suit in some locations soon after Wal-Mart. In 2008 Dominick's
Dominick's
Dominick's Finer Foods, Inc. is a grocery store chain and subsidiary of Safeway Inc. with locations mainly in the Chicago area, Illinois, USA. Dominick's distribution center is located in Northlake, while its management offices are located in Oak Brook....
also began to provide prescription drugs for four dollars. Many other chains have followed their lead, including CVS and Sams Club(owned by walmart). Most chains in the USA now offer some sort of discount plan. This is usually in the form of a special price list, a loyalty discount program, or price matching of other competitors schemes. Prescription pricing has become extremely competitive, with such discounts often resulting in a charge lower than the copay through a patients insurance.
Counterfeit medications
There are many counterfeit medicines on the market, posing as both generic and proprietary brands. The counterfeits may be less effective than the real drug, or may have no active ingredients at all. This is a particular problem in countries with poor supervision of the pharmaceutical sector, which often also have many inhabitants with low incomes. Medicines bought over the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
are also often found to be counterfeit. This can make saving on prescription costs risky.
Research regarding out-of-pocket prescription costs
While there are many mechanisms for reducing out-of-pocket prescription costs, pharmaceutical samples actually do not reduce prescription costs. Even after receiving samples, sample recipients remain disproportionately burdened by prescription costs.
For many drugs, especially brand-name antihypertensive fixed-dose medications, the clinical benefits must be balanced with patient financial burden and nonadherence during prescribing.
A study has been done on the cost effectiveness of purchasing a three-month supply, which finds that there is a quantitative cost difference when patients in the U.S. fill larger quantities of a prescription drug for a chronic condition.
Another way to perhaps reduce out-of-pocket costs is to improve physicians' access to health information technology. While physicians with high rates of IT use do not significantly higher knowledge of drug costs, it has been suggested that health IT should be improved to make it easier for physicians to access cost information at the point of care.
See also
- Generic drugGeneric drugA generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
- Inverse benefit lawInverse benefit lawThe Inverse Benefit Law states that the ratio of benefits to harms among patients taking new drugs tends to vary inversely with how extensively a drug is marketed...
- Pill splitting
- Prescription DrugPrescription drugA prescription medication is a licensed medicine that is regulated by legislation to require a medical prescription before it can be obtained. The term is used to distinguish it from over-the-counter drugs which can be obtained without a prescription...