Here Are the Fastest Ways to Save on Your Prescription Drugs

If prescription drug prices are straining your personal finances, your insurance coverage might be to blame. Each year, Americans pay hundreds of billions of dollars on medication, with the average American estimated to spend three times as much on prescription drugs compared with patients in other countries.

While the White House and Congress alike have shown an appetite for reducing drug prices consumers face, many Americans continue to struggle with the high cost of prescriptions. If you're one of them, read on to find out how you and your family can save money on your next trip to the pharmacy.

Name brand vs. generic

The distinction between name-brand drugs and their generic alternatives is well known to many consumers, but bears repeating. In many cases, generic medications are nearly identical to their name-brand counterparts. Typically, they include the same ingredients and treat the same symptoms, but at a fraction of the price.

As a patient, it can be easy to assume that your doctor is considering the cost of medication when prescribing drugs, but that isn't always the case. Oftentimes, healthcare providers don't know the exact costs their patients will face when picking up the medications they prescribe. If you're concerned about the cost of a drug, ask your doctor whether there are generic options or lower cost alternatives to your medication.

In some cases, a name-brand medication may be necessary, either due to a lack of availability or effectiveness of lower-cost or generic drugs. Many drugmakers offer financial assistance to consumers who need help affording name-brand medications. These Patient Assistance Programs (PAPs) can reduce or eliminate the cost of prescriptions for qualified patients, and can usually be found on a drug maker's website.

Understanding pharmacy options

Not all pharmacies are created equal. Your health insurer likely provides different coverage rates for different pharmacies. This can mean that simply going across the street to pick up your medications could save you money.

Health insurance providers typically categorize pharmacies into three categories: out of network, in network, and preferred. Patients going to an out-of-network pharmacy could be on the hook for more of the cost of their drugs than those going to an in-network provider, and it is often cheapest to go to a preferred pharmacy, if available. A pharmacy's status can change over time, so be sure that your pharmacy is still in-network or preferred before your next refill.

It also pays to check online options, which can be both cheaper and more convenient. Amazon Pharmacy and CostPlusDrugs.com are just two of the many online pharmacies that could offer more cost-effective options for medication. Additionally, prescription services such as GoodRx may offer digital coupons without using your medical insurance.

Explore your coverage options

In some cases, it may make sense to switch insurance coverage altogether if you or your family need certain high-cost medications. Those on a Medicare Part D prescription drug plan can change their coverage each year during Medicare open enrollment from Oct. 15 through Dec. 7. Other options include receiving coverage from a spouse's medical insurance plan, or researching Affordable Care Act plans in your state.

When considering changing coverage, be sure to know the provisions of a new plan, and how they will affect your medication coverage. Consult an insurer's formulary, usually located on their website, for a detailed explanation of which drugs it covers and in what amounts.

As mentioned above, it is important to understand which local or online pharmacies are covered by an insurer before making the switch. Be aware that changing medical providers can have broad effects on your health insurance coverage beyond prescription drug costs, so take care when considering this option.

When looking to save on prescription drugs, first talk to your doctor, who may offer lower cost alternatives or generic versions of your medication. Confirm whether your pharmacy is a preferred provider, and consider online options. In some situations, it may make sense to change your medical coverage plan altogether, but this should be done with great caution. By understanding your coverage and alternatives, you could see big savings when you go to the pharmacy.