Drug Costs, Coverage, and Savings: Your GoodRx Guide

Overview

Prescription medication is a cornerstone of U.S. healthcare. People rely on their doses to help prevent, fight, or manage medical conditions. About 6 in 10 adults take at least one prescription medication, and roughly 1 in 4 say they take at least four medications, according to KFF, a leading health policy organization.

Affording medication is especially difficult for those who:

• Take four or more medications

• Have chronic conditions

• Have annual household income less than $40,000

GoodRx Research found that prescription prices continue to rise, which can make adults less likely to stick with their medications — potentially endangering their health. People in the U.S. experience the high costs of brand-name medications more than anyone else in the world. But there are ways to save on medication amid efforts to lower prescription costs through legislation such as the Inflation Reduction Act, efforts such as Medicare Drug Price Negotiation, and entities such as state prescription drug affordability boards.

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Medication costs and coverage

Prescription medication coverage is among the 10 essential health benefits that most health insurance plans must cover under the Affordable Care Act (ACA, also known as Obamacare). The list of medications your health plan covers is called a formulary. Formularies typically change annually — but they can add and drop medications at any time during the plan year. That’s why it’s important to compare formularies when making your health insurance selections during open enrollment.

Formularies have multiple tiers, or levels, of prescription coverage. Generally, the lower the tier, the lower your cost-sharing. What you pay out of pocket depends on:

• Medication type

• Its tier in your prescription plan

• Pharmacy chosen (and whether it’s in your plan’s network) 

If you have Medicare, Part D covers medications that you pick up at a pharmacy. Medicare Part A covers medications you get while admitted to a hospital or inpatient facility. Part B covers some office-based medications administered by a healthcare professional, such as infusions and certain vaccines, as well as most durable medical equipment.

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Prescription medication costs in America

Prescription prices in the U.S. across all medications (brand-name and generic) were nearly three times as high as the average prices in other high-income countries, according to a federal study using 2022 data conducted by RAND Health Care.

Pharmaceutical companies set medication prices in the U.S. with little to no direct government regulation. Additionally, the cost of pharmaceuticals in the U.S. is managed through third-party pharmacy benefit managers, which are companies that negotiate discounts and rebates. 

The Inflation Reduction Act of 2022 gave the federal government the power to negotiate medication prices on behalf of Medicare, which is the largest single buyer of healthcare products and services in the U.S. Medicare Drug Price Negotiation aims to lower out-of-pocket costs for seniors and is projected to save the government about $100 billion over 10 years. 

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Medication access

Health insurance plans often control costs by limiting medication access through:

• Prior authorization: You may need approval from your health plan before your prescription is covered.

• Step therapy: Your plan may require you to try a less expensive medication before a more expensive one.

• Quantity limits: Your plan may limit how much of a medication you can have filled at one time.

• Separate deductible: Your plan may require you to pay a certain dollar amount upfront for prescriptions before paying claims. GoodRx Research found that a growing number of commercial health insurance plans have separate pharmacy deductibles.

Those who are uninsured or underinsured may find low-cost medication at community health centers through the 340B Drug Discount Program. Federal, state, and local governments make some medications, such as Narcan (naloxone), free to the public. And birth control is supposed to be free under the ACA if you have health insurance, which means no cost-sharing when you see a healthcare professional in your plan’s network.

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Generics and biosimilars

You can almost always save money by choosing a generic medication instead of a brand-name one, when possible. Generics cost 80% to 85% less than their brand-name equivalents and are just as effective in most cases. If a generic isn’t available, it may be because the manufacturer still holds the patent. That prevents generic drug manufacturers from marketing their own versions of the medication and selling them for a lower price.

Biologics are made from living organisms and may have “generic” versions called biosimilars. A biosimilar is very comparable to an FDA-approved biologic, which is called its reference product. For instance, Humira (adalimumab) is a widely used biologic that has a growing list of biosimilars. A pharmacist may be able to automatically substitute an interchangeable biosimilar for Humira — such as Cyltezo, Abrilada, or Simlandi — depending on your state’s pharmacy laws. But for Humira’s other biosimilars, your pharmacist may be required to authorize the switch with your prescribing healthcare professional. 

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Insulin and other diabetes medications

Depending on what type of diabetes you have and its severity, you may need insulin to manage your blood glucose (sugar). If you have Type 1 diabetes, you need it to survive. Insulin helps prevent serious health complications. Cost forces some people with diabetes to ration insulin, which jeopardizes their health. 

The Inflation Reduction Act changed Medicare’s insulin coverage. In 2022, the law capped the cost of insulin at $35 a month for Medicare Part D enrollees. At least 25 states have caps on monthly copayments for insulin for state-regulated plans, as well.

Saving on insulin can often involve using biosimilars. For instance, in 2021, Semglee became the first interchangeable biosimilar to the popular long-acting insulin Lantus. You can also find lower-cost private-label insulin at stores including Walmart and Sam’s Club. 

If you have Type 2 diabetes, ways to control your blood sugar may include injectables, metformin or other oral medications, and lifestyle changes.

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Medication discounts and delivery

Getting a break on brand-name medication costs can involve using programs run by their manufacturers.

Pharmaceutical companies offer patient assistance programs (PAPs), which provide free or low-cost medication to those who qualify. You may be eligible for a PAP if you’re uninsured or underinsured. Nonprofit PAPs, such as the Patient Advocate Foundation, offer copay assistance. Getinsulin.org, a tool that connects people to resources, can also help you access insulin.

Manufacturer copay cards typically help people with commercial health insurance afford their medication. People with Medicare or Medicaid aren’t eligible.

Here are other ways to save on medications:

• Ask your prescriber to switch you to a preferred product on your insurance plan’s formulary.

• Ask your healthcare professional to write a prescription for a 90-day supply of medication instead of a 30-day supply. In addition to potential savings on your prescription, you’ll also save on dispensing fees and trips to the pharmacy.

• Use a mail-order pharmacy.

• Use a GoodRx coupon. If you have insurance, the cash price you’ll pay instead of using your prescription coverage may be lower than your copay.

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High-cost medications

For some medication, high cost is an understatement. If you have a rare disease, you may need an orphan drug — a medication used for the diagnosis, prevention, or treatment of a rare disease — that costs hundreds of thousands of dollars, or even millions. And coverage restrictions are typically daunting. 

Knowing how to use your insurance plan’s appeal process or applying for a clinical trial are steps that may give you more affordable access to medication. It’s important to note that Medicare and Medicare Advantage have their own appeal processes. 

Another example of high-cost medications is gene therapy, which often comes at the highest prices. That’s the case for Lenmeldy, which treats a rare genetic condition called metachromatic leukodystrophy. At a price of $4.25 million for a one-time treatment, it is the highest-priced medication in the world.

Here are the highest-priced medications in the U.S. in 2024, all of which cost at least $3 million and are one-time, single-dose treatments:

1. Lenmeldy: As mentioned, this is the most costly medication, at $4.25 million per treatment.

2. Hemgenix and Beqvez: These gene therapy medications, tied at $3.5 million per dose, treat hemophilia B.

3. Elevidys: At $3.2 million per dose, this treatment can address a root cause of Duchenne muscular dystrophy in certain children younger than 6.

4. Lyfgenia: At $3.1 million per treatment, this is a potentially curative gene therapy for sickle cell disease. Another new gene therapy for sickle cell disease, Casgevy, has a list price of $2.2 million.

5. Skysona: This infusion treats a genetic condition called cerebral adrenoleukodystrophy in boys ages 4 to 17. It costs $3 million per dose.

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