In the U.S. healthcare market, where the promise of consumerism often falls short, shopping for medications has been the exception. Most prescription drugs (86%) in the United States are sold through retail pharmacies, including increasingly popular mail-order and online pharmacies. Increasingly, pharmacy discount sites give consumers real opportunities to save money by shopping around.
But even in the generally consumer-friendly world of retail pharmacy, there is still room for improvement, according to new research from Prescryptive Health, a healthcare technology company. The company conducted a national survey with 1,000 consumers who use independent pharmacies and with 340 independent pharmacy owners or pharmacists that help operate independent pharmacies.
The consumer survey shows that consumers understand they can shop for medications based on price. Nearly all (95%) respondents said they are aware that drug prices can vary by pharmacy.
But 90% of survey respondents said they would appreciate knowing the price of their medication before they get to the pharmacy and 85% said knowing the price ahead of time would improve their pharmacy experience. These figures suggest that the current consumer experience in retail pharmacy is not as transparent as consumers would like it to be.
Improving visibility into drug prices may help consumers take their prescriptions as prescribed.
According to the Kaiser Family Foundation, one-quarter of American adults report difficulty paying for prescription drugs, and nearly as many reported that they or a family member had avoided filling a prescription, cut pills in half, or skipped doses because of cost. That figure is higher among women, people of color, and lower-income people.
In the Prescryptive Health survey, nearly three-quarters (73%) of consumers said they would be more likely to talk to their prescriber about lower-cost options if they knew the price of prescriptions in advance. Such consultation could prevent people from avoiding or skipping prescriptions because of financial hardship—but people have to know they’re likely to have a problem with the price in order to proactively try to find alternatives they can afford.
In retail pharmacy, consumers have gotten savvy about the most cost-effective way to pay for their medications.
Nearly one-third (31%) of survey respondents said they primarily pay for prescriptions out of pocket. Yet even among consumers with health insurance, 61% said they have paid cash for prescriptions despite their insurance coverage. Of those, 30% said their medication was less expensive with a discount card than it would have been if they had used their insurance. Nearly one in five (18%) said they knew they wouldn’t meet their deductible, presumably suggesting they may as well get whatever cash-pay discount they could.
Paying cash for prescriptions has become a sound strategy for saving money, thanks to the rise of pharmacy discount cards and programs. Paying this way can save consumers money on individual prescriptions but it can be costly in another way. When the consumer uses a discount card, those payments rarely count towards their deductible. It therefore takes consumers longer to meet their deductible—if they meet it at all. Once the consumer meets their deductible, the health insurer picks up the costs for covered services but until that point, the consumer pays the full cost on their own. Short-term prescription savings can actually lead consumers to pay more of their other healthcare costs for longer.
This dynamic isn’t going away—and is increasingly creating complexity for consumers. In the past one to two years, 38% of independent pharmacy representatives surveyed said they have observed an increase in discount program usage.
Pharmacy decision makers believe consumerism in pharmacy is here to stay. Almost all (96%) said they believe consumer shopping for prescriptions will stay strong in the next one to two years, while 85% said they expect shopping to increase in that time. Nearly three-quarters (74%) said they appreciate consumers’ ability to compare prescription prices.
Independent pharmacy representatives spend a lot of energy on pricing. More than half (55%) said they spend as many as six hours per week reviewing drug prices and 42% said they are spending more time on pricing than they did two years ago.
Price and price transparency aren’t the only aspects of the retail experience that consumers appreciate. Approximately two-thirds of consumers said convenience sets their independent pharmacy apart while 64% said it was customer service and 38% said knowledge.
On the flip side, almost all (93%) pharmacy representatives said they believe they offer competitive prices—but most are not trying to be the cheapest. Nearly three-quarters (73%) said they try to offer reasonable prices but not the lowest, and just 16% said they try to be the lowest-cost pharmacy available.
Nearly half (47%) of consumers surveyed said technology and modern communications are top requirements for sticking with a particular pharmacy over the next two years, even more important than a pharmacy being lowest cost.
Pharmacy decision makers also recognized the value of technology and communications, in line with consumer expectations and priorities, but not all of them are focused on those areas. Nine out of ten (89%) independent pharmacy representatives said they believe technology could improve patients’ overall experience with their pharmacy. But 40% said they are not using technology to its full potential and barely half (53%) use technology to compete for patients.