The percentage of prescription drugs paid for using discount cards has steadily risen over the last several years. In 2021, patients (i.e., healthcare consumers) used discount cards for 5.4% of their drug purchases1 (for more data and information on recent discount card trends, IQVIA’s report linked at the end of this article is a great resource).
Discount card transactions may seem like a proverbial drop in the bucket when compared to the hundreds of billions of dollars spent on prescription drugs in this country. However, their existence and recent growth are reflective of the underlying problems with drug pricing and access in America. And most recently, GoodRx, one of the leading discount card companies, agreed to pay a $1.5 million civil penalty to the FTC for failing to report its unauthorized disclosure of consumer health data to Facebook, Google, and other companies. This raises questions about the security of consumers’ personal health information when using discount cards.
So, who needs discount cards, how do they really work, and where does Capital Rx fit in? Let’s dive in.
Who Needs Discount Cards?
Since discount cards are not insurance and cannot be combined with insurance at the pharmacy counter, they literally occupy a “crack” in the system. Patients who need these discounts usually fall into three broad buckets:
- Uninsured patients
- Insured patients who are “underinsured” or in their deductible phase (and must pay the full cost of the drug)
- Insured patients whose benefit does not cover the medication they are looking for
Without a discount card, an uninsured patient is often asked to pay the Usual and Customary (U&C) price of a medication at the counter. The U&C price can be significantly higher than the rate that an insured patient would pay, sometimes up to 90% more! So, the discount card lets uninsured patients access much lower rates, which can help them afford their medications.
Why do patients with insurance use discount cards?
You might think that a patient who has insurance would not need these discounts. It’s fair to ask: Shouldn’t their insurance coverage provide them with a discount, even if they have a high deductible plan? The short answer is: Yes, but while insurers do provide patients with discounts, and they know when members are in their deductible, they rarely pass on the best possible discounts.
Pharmacy benefit managers (PBMs), the entities responsible for providing insurance for prescription drugs, often have multiple prices for medications at each pharmacy. They manage this through maximum allowable cost lists (aka MAC lists) that are problematic for reasons we explain in Reviewing Drug Pricing Options: From AWP to AAC and Regulatory Impacts (at 13:45), but we won’t touch here beyond saying that this adds to the unpredictability of prices at the counter. At the end of the day, a patient with insurance could end up paying a higher price for their medication than a patient using a discount card, an inefficiency that discount card vendors have exploited.
Some insured patients will find that they do have coverage, but they have a restricted formulary that won’t allow them to fill certain types of medications. Examples of these could include retinol cream for wrinkles, weight loss medications, or medications that have an over-the-counter equivalent available. To avoid paying the high U&C prices, these insured patients will want to use a discount card for those prescriptions as well.
How do discount cards work?
Most discount card providers have websites and apps where patients can look up prices or download discount cards to access additional savings on their medication(s). Unfortunately, most discount cards use or show prices from the very PBMs that manage the MAC lists and leverage problematic price indexes like average wholesale price (AWP) to their advantage.
Many of the popular discount cards available also have significant fees and can take anywhere from $6-$11 per claim from the pharmacy and the patient.
Why does Capital Rx have a discount card?
Capital Rx designed the Capital Rx Advantage Card to provide more stable/consistent prices to consumers across the country. Generally leveraging the national average drug acquisition cost (NADAC) price index wherever possible, which is publicly available, consumers (and pharmacists) can see “the price” clearly based on what pharmacies pay to acquire the ingredients.
Our insured clients’ members do not need to use discount cards because they always get our lowest price on their medication(s) at any pharmacy. And with NADAC, there are no large swings in price from one month to month or from one pharmacy to the next, which often happens when PBMs adjust their MAC lists behind the scenes.
Like our other lines of business, Capital Rx does not sell claims or search data related to Capital Rx Advantage transactions. Drug prices are confusing enough. Patients shouldn’t have to worry about their personal health data being sold to advertisers.
What is the cost of using a discount card?
With the Advantage card, there is no subscription required or cost to download the card itself. It works at any pharmacy, and the low, transparent fees never amount to more than $1.99. We plainly disclose the fees in our terms and conditions. If you’re wondering if that’s normal, it’s not. Is it because the other cards don’t have marketing fees? No! It is because they don't want you to know how much they are making on each of your prescription transactions (we believe it’s at least three to four times the Capital Rx Advantage fee).
Will prescription discount cards always be necessary?
Until we live in a world where drug pricing is clear and there’s no need for a discount, patients that do not have insurance or are members of other pharmacy benefit plans may need to access our low, fair, consistent rates to see if there’s a benefit to using the Capital Rx Advantage card.
So, “Yes,” discount cards will likely be around for the foreseeable future. And while it does take some time and some effort, we encourage patients to leverage the resources available to seek out the best prices for their medications.
You never know until you look. The best price could be at the pharmacy you’d like to support just down the street.
If you'd like to learn more about the Capital Rx Advantage card, please Contact Us. We'd love to hear from you.
1Pharmacy Discount Card Utilization and Impact (IQVIA; Sep 06, 2022)