An August 2010 survey sponsored by UnitedHealthcare found that most Americans are concerned with their medication costs but admit they don’t know how much new prescriptions cost or whether a less expensive option is available.
Consumers who are unfamiliar with generic alternatives or lower-cost options may miss opportunities to reduce out-of-pocket drug expenses substantially. UnitedHealthcare estimated that if members with fully insured plans switched to generic or other lower-cost alternatives, the result could be a yearly health care savings of more than $1 billion, including about $490 million in prescription co-pay savings.
For more background on how generics and plan design can affect premiums and out-of-pocket costs, see Impact of Generic Medications and Insurance Premium Calculations.
Survey highlights
- Thirty percent of those surveyed admitted they had not taken or skipped a dose of routine medications because of the high cost.
- Sixty percent said they had concerns about medication costs; of those, almost 70% often didn’t know the cost of a prescription before purchasing it.
- When asked if they would be willing to switch to a lower-cost option, 94% answered yes.
The desire for information. The survey showed most Americans who purchase prescription drugs want to learn more about their options, especially lower-cost choices. Employers can help employees understand how much their medications cost and discover ways to reduce out-of-pocket spending without compromising effectiveness.
There are several practical steps employers can take to communicate options and support employees in finding cost-effective medications. For more on prescription benefits and tools like health savings accounts that can affect out-of-pocket responsibility, see Understanding Prescription Drug Benefits and Health Savings Accounts.
How employers can help
- Develop targeted communications that explain saving options, identify alternative lower-cost medications, and give guidance on pursuing those options. Communications can be phone calls, emails, newsletters, or posted materials.
- Use a co-pay tier system to show differences in cost and value between drugs. Place clinically and fiscally advantageous medications on the lowest tier with little or no co-payment, and put higher-cost medicines on higher tiers so plan members can clearly see potential savings from alternatives.
- Give pharmacists clear messaging about lower-cost effective options. When employees go to fill prescriptions, pharmacists can present alternatives and, if appropriate, contact the prescriber to approve a change.
- Consider a pill-splitting program when clinically appropriate; halving tablets can reduce co-pays by up to 50% when the prescription and physician instructions allow it.
Employees and employers should encourage members to ask pharmacists about alternatives and check whether a lower-cost option is therapeutically equivalent. Employers can also work with plan sponsors to review formularies and utilization management strategies to support cost-effective prescribing. For additional context on comparing insurance cost estimates and medication savings, see Understanding Insurance Costs and Medication Savings.
Frequently Asked Questions
What is a generic medication?
A generic medication has the same active ingredient, strength, and dosage form as a brand-name drug and is usually offered at lower cost once approved by regulators.
Can a pharmacist switch my prescription to a generic without my doctor's approval?
Pharmacists may substitute generics when state law and the prescription allow it, but some changes require prescriber approval; check with the pharmacist and prescriber for your situation.
How can employers help employees reduce prescription costs?
Employers can provide clear communications about tiers and alternatives, engage pharmacists, review formularies, and offer tools like health savings accounts to help manage expenses.