Prescription costs

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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.

United States[edit]

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.[1] 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.

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[edit]

A very large number of people in the countries of the United Kingdom get prescriptions partly or totally paid for by the National Health Service.[2] In Scotland, Wales and Northern Ireland prescriptions are free to all citizens. While in England 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 £8.20. One exception to this is if two items are prescribed of the same drug in the same form at different strengths (e.g. Ramipril 2.5mg capsules and Ramipril 5mg capsules) which would only incur one charge if they are printed on the same prescription. A prescription pre-payment certificate (or PPC) can be bought for £104.00, and covers unlimited prescriptions for 12 months. Alternatively, 3-monthly PPCs may be bought for £29.10 (Prices as of 1 April 2013). PPCs are sold to the public by the NHS Business Services Authority.

Countries where the cost of drugs is prohibitive[edit]

In many developing countries the cost of proprietary drugs is beyond the reach of the majority of the population.[3] There have been attempts both by international agreements and by pharmaceutical companies to provide drugs at low cost, either supplied by manufacturers who own the drugs,[4] or manufactured locally as generic versions of drugs which are elsewhere protected by patent.[5] 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.

Techniques to reduce costs[edit]

Ways to Reduce Prescription Costs

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 drugs 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.

Target followed suit in some locations soon after Wal-Mart. 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[citation needed]. 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.[6]

For many drugs, especially brand-name antihypertensive fixed-dose medications, the clinical benefits must be balanced with patient financial burden and nonadherence during prescribing.[7]

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.[8]

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 have 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.[9]

See also[edit]


  1. ^ Prescription Drug Costs: Background Brief –, Health Policy Education from the Henry J. Kaiser Family Foundation. Retrieved on 2011-04-23.
  2. ^ A quick guide to help with health costs including charges and optical voucher values, Effective from 1 April 2008, NHS
  3. ^ Angela Saini Making poor nations pay for drugs, New Scientist, 31 March 2007
  4. ^ GSK tops new ethical ranking for investors – health – 16 June 2008. New Scientist. Retrieved on 2011-04-23.
  5. ^ Drugs bust – 13 June 2001. New Scientist. Retrieved on 2011-04-23.
  6. ^ Alexander, G Caleb; Zhang, James; Basu, Anirban (2008). "Characteristics of Patients Receiving Pharmaceutical Samples and Association Between Sample Receipt and Out-of-Pocket Prescription Costs". Medical Care 46 (4): 394–402. doi:10.1097/MLR.0b013e3181618ee0. PMID 18362819. 
  7. ^ Rabbani, Atonu; Alexander, G. Caleb (2008). "Out-of-pocket and Total Costs of Fixed-dose Combination Antihypertensives and Their Components". American Journal of Hypertension 21 (5): 509–13. doi:10.1038/ajh.2008.31. PMID 18437141. 
  8. ^ Rabbani, A; Alexander, GC (2009). "Cost Savings Associated with Filling a 3-Month Supply of Prescription Medicines". Applied Health Economics and Health Policy 7 (4): 255–64. doi:10.2165/11313610-000000000-00000 (inactive 2015-02-01). PMID 19905039. 
  9. ^ Tseng, CW; Brook, RH; Alexander, GC; Hixon, AL; Keeler, EB; Mangione, CM; Chen, R; Jackson, EA; Dudley, RA (2010). "Health information technology and physicians' knowledge of drug costs". The American journal of managed care 16 (4): e105–10. PMID 20370310. 

Further information[edit]