Monday, November 30, 2009

Co-Pays Will Disappear (If Only We'll Let Them) - Part 1

We're often asked if we accept insurance for purchasing medications.  This is a great question as most pharmacies charge high enough prices that it makes sense to use insurance.  Insurance can help offset some of the high cost of prescription drugs especially when it comes to brand names.

What happens when the price of the medication is actually below the insurance co-pay?  Such a situation didn't really exist until the $4 prescription drug list came out.  Now many pharmacies offer this program and hence the co-pay maybe on its last legs.

Let's take a common drug like Simvastatin (Generic Zocor) used to control high cholesterol.  Typical insurance co-pays range between $10 - $20 for medications with some going as high as $25.

At typical pharmacy prices, it makes sense to purchase this drug using your insurance since the price of this drug is above $20 for 30 Tablets.  However, when the price is below the co-pay at $3.50 for 30 Tablets, it doesn't make sense to use your insurance.

With insurance, you would pay a minimum of $10 assuming your co-pay is $10.  Paying cash, you would only pay $3.50 saving you $6.50.  The savings is even higher when you purchase higher quantities.

The Simvastatin example will only become more common, as co-pays rise, generic manufacturers get direct access to the consumer, and more retail pharmacies try to match the flat pricing model. 

The word "co-pay" in relation to prescription drugs may finally become obsolete as consumers opt to save money by paying cash rather than use their insurance.  In our opinion, it couldn't happen soon enough especially when people save money on their medications.

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