The Med Diva

An insider's guide to Medicare Part D and more

Archive for the category “How to Lower Your Drug Costs”

Switching from Lipitor to a generic should be a no-brainer for Medicare members…or so I thought!

Brand drugs like Lipitor cost much more than genericsOn November 30, 2011, the first generic version of Lipitor® (atorvastatin) hit the market. A few months prior, my company asked me to write a letter to all the members in our Medicare Part D plans who were taking Pfizer’s top-selling cholesterol medicine. In the letter, I advised our members that less expensive generic versions of the drug would be soon be available. I also reminded them that not only do these generic drugs cost less than Lipitor, but copayments are also generally lower for generics than for brand-name drugs.

This is a no-brainer, I thought to myself. Everyone is going to take advantage of this savings opportunity, provided their doctors say it’s okay to switch to the generic.

I was wrong.

I just found out that less than 3 percent of the members who received this letter switched to a generic version of Lipitor. I find this very surprising.

Brand-name drugs, especially “blockbuster drugs” like Lipitor and Plavix®, are often a lot more expensive than generic drugs. And if pricing trends from 2011 to 2012 are any indication, I wouldn’t expect prices on brand-name drugs to come down anytime soon.

According to an Express Scripts report based on 2012 drug claims data, prices for brands increased 13.3 percent while generic drug prices decreased by 21.9 percent. The report states that the price differences between brand-name and generic drugs is more than 35 percent, which is “the largest widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.”

Granted, Pfizer did make a lot of efforts to hold onto its customers–for example, they offered insured patients a discount card to get Lipitor for $4 a month–but I know Pfizer didn’t reach everyone, because about 97 percent of our members are still getting Lipitor through their Medicare Part D plan. So about 97 percent of our members are not only paying more than they need to, but they are also approaching the Coverage Gap stage of their benefit a lot faster than those beneficiaries who switched to the generic drug.

Let’s compare Mr. Smith’s costs for Lipitor with Mrs. Johnson’s costs for the generic version of Lipitor as an example:

Mr. Smith always uses brand-name drugs
• During the Initial Coverage period, Mr. Smith has a 25 percent co-payment on brand-name drugs. He pays $32.25 for a 30-day supply of Lipitor. His plan pays the remainder, or $96.75.
• Mr. Smith always uses brand-name drugs, so he reaches the Coverage Gap in July. (Remember, it’s the total amount that both you and your plan pays that advances you to the Coverage Gap.)
• Now he has to fork over $61.25 for Lipitor (the full cost of the drug minus the
47.5 percent discount) for the rest of the year.
Mr. Smith’s total annual cost for Lipitor is $561.

Mrs. Johnson always uses generic drugs
•During the Initial Coverage period, Mrs. Johnson has a 25 percent co-payment on generic drugs. She pays $3.27 for a 30-day supply of atorvastatin, which is a generic version of Lipitor. Her plan pays the remainder, or $9.81.
• Mrs. Johnson always uses generic drugs whenever possible, so she never reaches the Coverage Gap.
Mrs. Johnson’s total annual cost for atorvastatin is $39.24.

I know I’d much rather pay $3.27 for a generic that’s just as safe and effective as a brand-name drug that costs 10 times more!

So is there anyone out there who can tell me why a large majority of Medicare beneficiaries are paying so much more than they have to for their medications? What am I missing? Surely not my brain!?


Study suggests most Medicare beneficiaries are paying too much for their Part D coverage

Seniors Pay Too Much for MedicareApproximately 20 percent of Medicare beneficiaries spend at least $500 more than they need to for their Medicare Part D prescription drug coverage, according to a new Health Affairs study released this week. That’s a lot of money being kept out of the piggy bank.

According to University of Pittsburgh researchers Chao Zhou and Yuting Zhang, only 5 percent of Medicare beneficiaries buying a Part D plan choose the plan that’s cheapest for them relative to their prescription drug needs. Based on their analysis of 2009 Part D data, the average beneficiary paid $368 more in premiums and drug costs than they would have if they’d chosen the least expensive plan that was right for them.

Zhou and Zhang attribute most of the overspending to seniors’ inclinations to pick Medicare plans with more generous features and lower deductibles, and thus, higher premiums. For example, they noted that the biggest mistake people make is picking a plan that covers generic drugs in the Coverage Gap (doughnut hole). Many beneficiaries appear to be paying hundreds of dollars more in premiums for this feature than they get back in drug benefits—perhaps because they don’t ask their doctors to prescribe generic drugs or they just never reach the Coverage Gap.

However, the researchers acknowledge there are also a few reasons why Part D beneficiaries may not want to choose the cheapest plan. Some seniors may choose a more expensive plan because it offers better customer service or has a higher Medicare star rating, or because they may be willing to spend a little more for peace of mind in case their medication needs unexpectantly increase.

So how do you find the lowest-cost Part D plan that’s also the best fit for you?

As I’ve said in the past, you should look for a plan that offers the lowest total cost based on the medications you take.  When shopping for a plan, remember to consider the monthly premium and annual deductible as well as the annual costs for all your medications. Fortunately, those good people at Medicare have a great online tool called the Medicare Plan Finder that makes it easy for you to compare costs each year. Here’s what you do:

1. Go to and click on “Find health & drug plans.”  (You’ll see this in a yellow box near the top left of the page.)  

2. Enter your zip code, and then answer the other questions. Make sure you choose one or two pharmacies that are near you, and specify all the drugs you take (and their dosage). You’ll also need to say whether you get your prescriptions filled at a retail or mail-order pharmacy.  Answering these questions is the only way the tool will give you accurate cost information for your personal drug needs.

3. On the search results page, click on “Prescription drug plans (with original Medicare)” to see a complete list of stand-alone Part D plans available in your area. You can also refine your search on this page.

4. The generated list will show the lowest-cost plan first, which includes monthly premiums as well as out-of-pocket costs for the drugs you selected. And because a cheap plan with a low star rating may end up costing you more in the end (more time, more aggravation, more worry, etc.),  you should also sort results by Overall Plan Rating to make sure the lowest-cost choices have a good star rating (3.5 or more stars). 

Remember, Medicare Open Enrollment is October 15 through December 7, 2012.

Expect higher Medicare co-pays for brand-name drugs in 2012

I’ve said it once and I’ll say it a hundred times: Lower-priced, FDA-approved generic drugs are the best way to go if your doctor says they are right for you and your condition. Here’s just one more reason why.

Starting in 2012, your Medicare prescription drug plan co-payments for many brand-name drugs could go up significantly.*

According to a recent study by data analysis firm Avalere Health, co-payments (the portion of the prescription cost that you pay the pharmacy) for Tier 3 preferred brand-name drugs will increase by 40 percent on average next year, from $29.01 in 2011 to $40.60.  Preferred brands are those drugs for which your Part D plan has negotiated a discount with the manufacturer.

In addition, Tier 4 non-preferred brands will average nearly 30 percent more, from $71.52 this year to $91.67. You’ll also pay a bigger share of the cost of specialty drugs—about 32 percent compared to about 27 percent this year. That may not sound like much, but when you consider specialty drugs can cost $1,000 or more per prescription, a 5-point cost-share increase could be huge.


Co-pays for generics will remain stable or decline

Now for the good news. According to this same study, co-pays for preferred generics will remain stable (about $3.79 on average) in 2012 while co-pays for non-preferred generics will decrease to $9.90 on average. This drop is a 43 percent reduction from the current average cost of $17.29.

According to Avalere CEO Dan Mendelson, the study emphasizes how important it is for Medicare beneficiaries to review all of their Part D plan’s costs before Open Enrollment ends December 7.

As I’ve mentioned before, if you’re shopping around for a new Medicare Part D plan, you should look for a plan that offers the lowest total cost based on the medications you take. It doesn’t help to choose a plan with the lowest monthly premium, only to find out weeks or months later that you’re going to pay more in the long run because the co-payments for your medications are higher in this “low-cost” plan or the cost of your annual deductible has increased.

* Avalere figures shown are averages for the entire Medicare Part D program. Actual costs could vary markedly by medication, plan, and region of the country.

’Tis the season to shop: Seniors could save hundreds of dollars by switching Medicare Part D plans

Don’t Miss Your Chance to Save: Open Enrollment Ends December 7

Whether you’re a senior on Medicare, a caregiver for a Medicare beneficiary, or just helping your parents with their money matters, ’tis the season to go shopping. Even if you are satisfied with your current prescription drug plan, you could save a few hundred dollars or more by comparison shopping and choosing a plan that better meets your needs.

According to a recent survey of 71,000 people enrolled in Medicare prescription drug plans, 81 percent lowered their costs by an average of $298 by switching plans from 2006 to 2007. This number is promising, because it shows that even though Medicare Part D is complex and often confusing, seniors are using available tools and services to choose plans that cost them the least based on their prescription drug use.

Despite the results of this one survey, however, advocates like me still have a long way to go to convince Medicare beneficiaries that it’s a good idea to compare plans every year during the Open Enrollment period. According to the Centers for Medicare and Medicaid Services, only about 7 percent of the 17 million seniors on Medicare drug plans switch plans each year. Another survey conducted by KRC Research confirms CMS’s findings, with two out of three seniors stating they are unlikely to shop around for Med D plans. Medicare experts say this suggests that millions of beneficiaries could be paying more than they have to for prescription drug coverage.

Top 5 Reasons Why Seniors Don’t Make a Switch

According to senior advocates and insurance advisors, there are several reasons why people are hesitant about switching their drug plans:

1. Many believe that once they join a drug plan, they should stick with it long term, just as they stayed with the same private health insurance plan for many years before enrolling in Medicare.
2. A lot of seniors aren’t as aware as they should be of changes to the Part D benefit or of the opportunity to change plans during the Open Enrollment period.
3. With up to 30 or more drug plans on the market in each state, many seniors get overwhelmed or frightened at the thought of changing plans, even if another one would better suit their prescription drug needs and lower their costs.
4. Although Medicare’s easy-to-use Plan Finder tool allows beneficiaries to enter their medications to find a plan with the lowest overall annual costs, many seniors are uncomfortable going online or unable to use computers.
5. Many seniors are very satisfied with their current plan—even if it does cost more—and feel that “if it’s not broken, why fix it?”

Yes, shopping around and switching plans does take some time and can be a bit daunting.  But keep in mind these two good reasons for adding this annual task to your “to do” list:

• Medicare plans can and often do make annual changes to their offerings or formulary (list of covered drugs), which can increase drug costs by thousands of dollars, or make it more difficult for you to get certain drugs.
• If your drug needs have changed since you last enrolled in a Part D plan, your current plan may not be meeting all of your needs.

Remember, the Medicare Part D open enrollment season, which began October 15, continues only through December 7. If you need more information on Medicare Part D coverage, visit the Medicare website or call 1-800-MEDICARE.

Popular brand-drug patent expirations represent $9 billion+ in savings for Medicare beneficiaries

You probably already know that the standard Medicare Part D benefit includes a 50% discount on most brand-name drugs during the Coverage Gap stage.  What you may not know is that even with the discount, lower-cost generic drugs could still help you save more all year long.

Using generic medications instead of brand-name drugs is one of the best ways to lower your overall costs. And here’s even better news: Frequently used brand-name drugs such as Lipitor®, Lexapro®, Seroquel®, and Singulair® are expected to come off patent in 2012. These drugs currently account for more than $31 billion in retail sales. The new generic versions of these drugs could represent more than $9 billion in incremental savings opportunities for Medicare beneficiaries.

Generics are a great choice for savings and quality 

If you’re like me, when you think “generic” you may not always think “quality.” Given the choice of my favorite brand of raisin bran cereal for $3.99 or the generic no-name brand for $2.99, I’ll pay the extra dollar any day. Same goes for brand-name yogurt, shampoo, bread, or body lotion. The brand-name product just seems to taste or work better than the no-name versions.

 But FDA-approved generic drugs have been tested for quality and strength, and are as safe and effective as their brand-name counterparts. Generic drugs look different, but you can expect them to provide the same health benefits as their brand-name counterparts—often at a lower cost to you.

 I always ask my doctor to prescribe the generic drug if it’s available, because I know it will work just as well but cost so much less. In fact, according to the Food and Drug Administration, generic drugs can cost 30 percent to 80 percent less than brand-name drugs.

So if you’re taking a brand-name medication, ask your doctor whether a lower-cost generic drug could work for you. Keep in mind there are two types of generic drugs:

• A generic equivalent contains the same active ingredients as its brand-name counterpart and works the same way in your body.

• A generic alternative may contain different active ingredients, but is used to treat the same condition.

Remember, your doctor wants to help keep your medications affordable, so it’s always okay to ask if the prescription can be written for a generic drug. You deserve to save money, so don’t be afraid to just ask!

Saving Money with the Mail-Order Pharmacy: Give it a Try!

Open Enrollment for 2012 is October 15 through
 December 7, 2011.

  You may recall a very popular 1970s TV commercial for Life Cereal, in which two brothers are discussing “some cereal” that’s “supposed to be good for you.” Neither wants to give it a try, so they push it toward their little brother, Mikey. Turns out little Mikey, who supposedly hates everything, really likes it.

For many seniors enrolled in Medicare prescription drug plans, a similar scenario often plays out. You may be constantly bombarded by letters from your plan telling you that switching to a mail-order pharmacy is good for you because it will help youlower your out-of-pocket costs and delay entering the Coverage Gap (donut hole). But you’re reluctant to give it a try for various reasons (procrastination, perhaps?) so you toss the information in the garbage.

I have to admit I was a little hesitant to try my mail-order pharmacy at first, simply because I didn’t want to deal with the paperwork involved. I thought it would be a hassle to switch my one prescription from my favorite retail pharmacy, but when I used my plan’s price comparison tool on its website and discovered I would pay $100 less a month with mail, I immediately made the switch. 

Guess what? It wasn’t a hassle at all! The customer service rep did all the work for me–she even called the doctor with my permission to get my prescription–and in a few days my medication arrived in a secure package in my mailbox.

Today I have nothing but good things to say about my mail-order pharmacy. I can order up to a 3-month supply of my medication for a lot less money than a 30-day supply at the local pharmacy. My drugs arrive in my mailbox, so I don’t have to drive to the pharmacy and use up gas or wait 15 minutes in line. (There’s never a line at my mailbox!)

If I have to work late, I don’t have to worry about the pharmacy closing before I get home — after all, my mailbox never closes!  And If I have a question about my medication I can call my plan and talk to a pharmacist any hour of the day, for as long as I want, without having to worry that I’m holding up the line. Best of all, my mail-order pharmacy sends me automatic refill reminders by e-mail, and I can order refills online.

I like to tell my friends and family that switching to mail order is like the switch we all made from typewriters to computers. Many of us were reluctant to try computers because switching required us to change our ways and learn a new skill. But wasn’t it wonderful once we got the hang of the Internet, e-mail, word processing, and Facebook? We like it! Hey Mikey!

Countdown to Medicare Part D Open Enrollment: Day 7

Open Enrollment for 2012 begins on Saturday, October 15, and ends on Wednesday, December 7, 2011.

Day 7: The Medicare Part D Coverage Gap Discount Program helps you save when you’re in the donut hole 

 The Affordable Care Act, otherwise known as Obamacare, includes provisions to close the Medicare Part D Coverage Gap (aka “donut hole”) to help lower prescription drug costs for Medicare beneficiaries. One of the major provisions is the Coverage Gap Discount Program, which went into effect January 2011. According to the Centers for Medicare & Medicaid Services, more than 1.7 million Medicare beneficiaries had taken advantage of program through August 31, 2011, resulting in a total savings of almost $930 million.

 Under the Discount Program, if you have Part D coverage but don’t get Extra Help from Medicare, you get a 50 percent discount on “applicable” brand-name drugs if and when you reach the Coverage Gap.  This discount applies at either retail or mail-order pharmacies, but does not include the cost of the pharmacy dispensing fee.  Another good thing is that the full cost of the drug counts toward your out-of-pocket spending, which helps you move out of the Gap and into the Catastrophic Coverage stage.

 In addition, this year you’ll pay only 86 percent of the total cost of generic drugs and supplies used for the delivery of insulin when you’re in the Gap.  

How the Coverage Gap Discount Program works

 Let’s say you have reached the Coverage Gap and go to your pharmacy to fill a prescription for a brand-name drug, such as Diovan®. The full price of Diovan at this pharmacy is $50 and the dispensing fee is $2. Once the 50% discount is applied, the price of Diovan is now only $25. The pharmacy charges a $2 dispensing fee, so your total cost for the medication would be $27. The entire amount, however–$52–will be counted as out-of-pocket spending and will help you move out of the Gap.

Who is eligible for this savings while in the Coverage Gap?

You must meet all of the following criteria to be eligible for discounts under the Medicare Coverage Gap Discount Program:

  • You are currently enrolled in a Medicare prescription drug plan (PDP) (including employer-sponsored plans called Employer Group Waiver Plans), or a Medicare Advantage Plan that includes prescription drug coverage.
  • You do not get Extra Help from Medicare for your prescription drug costs.
  • You have reached the Coverage Gap stage of your benefit.
  • You fill a prescription for a covered brand-name drug.

If you are fortunate enough to be enrolled in a Part D plan that don’t have a Coverage Gap stage, you’ll still be eligible to get a discount on brand-name prescriptions once you reach the defined standard initial coverage limit (ICL). In 2012, the standard ICL is $2,930

In coming weeks I’ll explore the Discount Program further, and tell you some things the drug makers don’t want you to know about it.

Countdown to Medicare Part D Open Enrollment: Day 10

Open Enrollment for 2012 begins on Saturday, October 15, and ends on Wednesday, December 7, 2011.

Day 10: It pays to shop around during the Open Enrollment period

For the past week I have been sharing some helpful tips for you to use while researching your Medicare Part D plan options during Open Enrollment. After reading the results of a recent poll conducted for the National Council on Aging (NCOA), however, I hope you are heeding this advice and actually shopping around!  

According to the survey, many Medicare beneficiaries are unaware that they can or even should do their due diligence and compare Medicare plans. In fact, 46 percent of respondents have never bothered to shop for better Medicare coverage! The reasons stated are varied:

• 41 percent said they thought they couldn’t save money by changing plans (they’re wrong!)
• 35 percent said that Medicare is confusing (they’re not wrong!)
• 16 percent said they just didn’t understand Medicare at all (I can sympathize!)

Being enrolled in a Medicare Part D plan is very similar to owning a car. When you own a car, you check it on a regular basis to make sure it’s running well and getting good gas mileage. Over the years, as the car starts to cost more money in maintenance, you shop around to compare prices, gas mileage rates, safety data, and other features in order to get the best value. Oftentimes you can find the best deal with the same brand—for example Honda or Ford—just by purchasing a newer model of your old car.

It’s really not much different with your Medicare prescription drug plan. Every year at this time you should check your plan to make sure your medications will still be covered the following year, and that your monthly premium isn’t going to increase more than you would like. If it looks like your plan is going to cost you more money in the new year, that’s your signal to go shopping. If you’re otherwise happy with the company that manages your plan, start with them first, as they may have another plan that better meets your health and financial needs.

To lower your drug costs, look for specific features in a Part D plan

Many plans offer online tools to help you compare plan costs and features.

Because all Medicare plans must follow strict guidelines set by the federal government’s Centers for Medicare & Medicaid Services (CMS), there are only limited ways they can help members save on prescription drug costs. For example, unlike General Motors or Sears, Medicare plans can’t hold a clearance sale on medications or use any popular marketing tactics such as a two-for-one sale or buy-one-get-one-free offer. However, there are several things you can look for in a plan if you want to maximize your savings, and many plan offer online tools on their websites to help you narrow down your search.

Tune in tomorrow for a list of things to look for and questions you should always ask when comparison shopping for a Medicare prescription drug plan!

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