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Medicare Part D: Ways to save money on your Rx drugs this year

Last year Valeant Pharmaceuticals purchased the rights to two life-saving heart medications from Marathon Pharmaceuticals. The two drugs, Isuprel and Nitropress, are used to treat abnormal heart rhythms and congestive heart failure. On the day that the sale closed, Valeant raised the drugs’ prices by 525% and 212%.

There was more to the story. A Congressional investigation later determined that Marathon Pharmaceuticals had purchased the same two drugs from another company in 2013 and at that time had raised their prices by 384% and 486%.

When companies have monopolies on critically important drugs, they can raise prices as much as they choose without losing their market share. But the larger problem is not the few drugs whose prices jump several hundred percent. Instead it’s that the prices of thousands of prescription drugs, including many that were patented more than a decade ago, are increasing at unsustainable rates.

In a report earlier this year the AARP Public Policy Institute examined the price histories of 397 prescription drugs frequently used by seniors. During an eight-year period starting in 2006, prices for those drugs increased at almost four and one half times the rate of general inflation. In addition, 300 of those drugs treat chronic conditions, which means that they must be taken on an ongoing basis year after year.

“It used to be the drug companies only took one price increase a year,” Dr. Steve Miller, chief medical officer at Express Scripts, told the New York Times earlier this year. “Now what they’re doing is taking multiple price increases multiple times a year.”

Retirees have relatively few ways to defend themslves from these price hikes. If you have Medicare, the most important thing you can do is re-evaluate your Part D coverage every year during the annual open enrollment period. Studies have shown that the vast majority of the 24 million people who have Part D stand-alone coverage are not in the lowest-cost plans for the drugs that they take.

Yet only 13% of them change plans each year, according to an analysis of four enrollment periods. And only 10% of people enrolled in Medicare Advantage plans, most of which include Rx drug coverage, switched their plans in a recent year, according the Medicare Payment Advisory Commission.

If you have Medicare Part D, here are steps you may be able to take to reduce your prescription drug costs without having to wait for open enrollment and the 2017 plan year.

1) See if there is a less expensive generic drug that can be substituted for the brand-name drug you take. Approximately 10% of retirees continue to take brand-name drugs even when generic versions are available. They may believe that brand-name drugs are better, possibly because their doctors told them so. Some doctors remain skeptical of the effectiveness of generic drugs and therefore they rarely prescribe them. A few years ago a survey found that one-quarter of the physicians polled did not recommend generics as a first-line therapy.

While it’s true that there have been occasional problems in the production quality of generic drugs, the frequency of those problems has dropped as the Food and Drug Administration has added several hundred inspectors. With this larger work force, the FDA has said that it is more closely monitoring the production of generic drugs and also making progress with a backlog of new applications from manufacturers of generics.

There have also been quality issues with brand-name drugs, although less often. But with prescriptions for generic drugs outnumbering those for brand-name drugs by almost eight to one, the proportion of reported quality problems with generic drugs is low. The FDA has stated that the quality of brand-name and generic drugs is the same.

In support of generic drugs’ effectiveness, Dr. Deepak Bhatt, editor of the Harvard Heart Letter, explained in the July 2016 isssue that “by law, not only do generic drugs have to contain the same active ingredient as the brand-name drug, they must also be identical in strength, dosage form, and administration; work the same way in the body; and meet the same standards for identity, strength, purity, and quality.”

If you want to see whether there’s a generic version of a brand-name drug, try the Consumer Reports Best Buy Drugs website. There you can not only see if a drug is brand name or generic, but you can also find the average monthly cost of similar drugs that treat the same condition. The site also describes how particular drugs work and occasionally includes warnings about their overuse, opiods being one example. And the Consumer Reports site sometimes designates a drug as a “Best Buy,” an approval rating that takes into account the drug’s effectiveness as well as its costs.

Another way to see if there’s a recommend generic equivalent is to use the Medicare web site’s Plan Finder, which is the only way to find the lowest-cost plan for a given set of drugs. In the Plan Finder, if you enter the name of a brand-name drug that has a generic equivalent, a pop-up message tells you that a lower-cost generic version is available. Then you can choose whether to stick with the more expensive brand-name drug or switch to the lower-cost generic version.

What if you’re taking an expensive brand-name drug that does not have a generic equivalent? You might see if there’s a generic version of another brand-name drug that is used to treat the same condition. In medical terms, this is called “therapeutic substitution.” Thus instead of a particular brand-name statin drug, the doctor may prescribe a generic version of a different brand-name statin drug.

Based on an analysis of the prescription drug records of more than 100,000 Medicare beneficiaries, one study estimated that those individuals’ Rx drug costs would have been $73 million less during the 2010-2012 study period if their doctors had used therapeutic substitution. Approximately one-third of that amount came out of beneficiaries’ pockets.

2) Don’t ask your doctor to prescribe a drug just because you saw it advertised on television. Late last year the American Medical Association called for a ban on consumer advertising of prescription drugs and medical devices, which it said were frequently misleading. A 2014 study in the Journal of General Internal Medicine analyzed 84 televised ads for prescription drugs and found that fewer than one-half of them made claims that were objectively true while 55% of the ads were misleading and 2% were false.

3) See if you can save money by changing refill schedules. Occasionally you can save a substantial amount by changing your refill schedule from 30 days to 90 days (mail-order), or vice versa. One study found that some plans subsidized their mail-order costs to take business away from retail pharmacies, which meant that people who used mail-order refills could benefit from the subsidy. The more prescription drugs you take, the more likely it is that one refill schedule will be less expensive than another, sometimes by several hundred dollars a year. To find out if you can save money by changing your refill schedule, call your plan or use Medicare’s Plan Finder, which shows how much you will pay with either refill schedule. If you change schedules, you will need new prescriptions from your doctors.

4) See if your plan has preferred pharmacies. Some stand-alone prescription drug plans and Advantage plans designate preferred pharmacies where you can get lower prices. In the popular Humana-Walmart Rx plans, for example, you will get the least expensive retail price at a Walmart Pharmacy. But you will likely save even more money using the plan’s mail-order refills. ◊◊

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