If you’ve searched the internet lately for information about prescription drugs cards, you’ve probably been overwhelmed by the sheer volume of what’s out here! There are literally hundreds of thousands of webpages, news articles, and YouTube videos telling you how much you can save and others telling you these cards are nothing more than a scam. I’ve seen TV news segments and videos from pharmacists explaining the Pros and Cons of discount drug cards but there’s so much mis-information out there it’s like the wild wild west of the internet.
It’s my hope today to give you information you can USE and Trust.
Needless to say – You’ve Got Questions like:
What Is a Discount Drug Card?
How Do They Work?
Are They Real or a Scam?
Can I Save Money Using One?
Are Some Better Than Others? How?
Are There Any Reasons Not to Use One?
How Do I Find A Reputable One?
My goal today is to answer these questions for you and help separate Fact from Fiction. I’ll also show you how to Get the Best Price using a prescription Discount Card and in Part 2 – I will show you ways to Protect Yourself and Your Privacy, as well as show you examples of Deceptive Marketing Practices and provide you with a review of some Discount Drug Cards I found on the web.
Let’s get started.
My name is Chris Petersen. I have worked in the prescription benefit management (or PBM) industry for over 25 years in a variety of roles from Software Developer, Account Executive in Sales and held several VP roles including Senior VP of Client Services for a PBM on the West Coast. Many of today’s discount card companies were my clients. So, I know how the industry works both internally AND from the perspective of the clients – the discount card companies themselves.
So, What is a Discount Drug Card?
These cards allow for discounts on prescription medications at all participating pharmacies.
Most pharmacies accept these cards for discounts ranging from 0%-90% off the pharmacy’s cash price.
Discounts vary based on the specific drug being purchased as well as the pharmacy that accepts them.
Generic drugs provide the largest discounts.
These cards work like coupons giving you discounts on drugs.
The cards are designed to give you a discount on all FDA-approved prescription drugs at your pharmacy.
Let’s take a look at an Example of a 30 day supply of the fiction drug – Zombrex. For you fact checkers out there, Zombrex, is a medicine from a video game called Dead Rising that retards the process of becoming undead.
How does a Discount Drug Card work?
Pharmacies enter the information on the cards into their computer system to send the prescription claim to a Prescription Benefit Manager (PBM) for adjudication. The PBM then sends information back to the pharmacy telling the pharmacist what collect from the member.
Before we talk about the details of drug cards, it’s important to understand HOW the industry works and what a Prescription Benefit Manager is. After all, these cards wouldn’t exist without a PBM.
So What is a PBM? Here’s the basic business model of a typical PBM. Pharmacy benefit managers build pharmacy networks made up of large chains like CVS, Walgreens, Rite Aid, as well as a number of smaller independent pharmacies.
To build a pharmacy network, the PBM sends out contracts to thousands of pharmacies. The PBM’s contract with these pharmacies and promised to drive traffic into their stores in exchange for negotiated discounts on medications.
The PBM’s also contract with large insurance companies, large employer groups, government entities (like the military), and yes, Discount Drug Card companies.
The PBM’s clients rely on the PBM to negotiate discounts for their clients so their client’s members aren’t paying the full cash price at the pharmacy.
The name of the game in the PBM industry is claim volume. The more members you control the more prescription claims you control and the more claims you control, the more leverage you have to negotiate discounts from your network.
All discount drug card distributors claim that:
1. The Cards are Free
2. There are No Claim Forms
3. They Never Expire
4. They Come Pre-Activated
5. They’re Accepted Virtually Everywhere
6. Everyone Qualifies – Even Your Pets
7. And You Can Save up to 75%
All this is TRUE. However, Only Some Cards Guarantee You’ll Always Pay the Lowest Price at Your Pharmacy. How can they make this claim? *Because they use ‘Lower-of’ Pricing during adjudication.
What’s Lower-of Pricing?
With a lower-of pricing guarantee in place the PBM will make sure the discount price is never higher than the pharmacy’s usual and customary price so the member always pays the lower-of the discount price or the pharmacy’s usual and customary price – whichever is less.
Don’t do what many Pharmacists Do and Lump All Prescription Discount Cards Together just because Some of them Cost You More at the Pharmacy.