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Walmart’s $4 generic prescription drug program ends up being cheaper for some Medicare patients than their own health insurance, according to a new study released Monday.
It’s more evidence that patients cannot always rely on their health insurance to get them the lowest prices for their prescription drugs, said Dr. Joseph Ross of the Yale School of Medicine, who led the study.
“Patients were paying more out of pocket when they were using their insurance than when they went to Walmart,” Ross told NBC News.
The study, published in the Annals of Internal Medicine, documents that Walmart provides a better deal than the government’s health insurance plan for people over 65. And that is bad news for Medicare, because if people don’t take their drugs, whether for cost or for other reasons, they tend to get sicker and then end up costing even more to treat.
“Everyone’s talking about pharmacy costs these days,” Ross said. “We did this study in part because of all the discussion about pharmacy gag rules.”
Pharmacy gag rules prevent pharmacists from telling patients that they could save money on drugs, for instance by not using their health insurance.
Pharmacy benefit managers are the middlemen between drug companies and pharmacies, and some of those companies have agreements forbidding talk of discounts. But some states have also banned pharmacists from giving this information to customers.
According to the National Conference of State Legislatures, at least 22 states have some kind of gag rule legislation.
One way patients can get around this is to ask, but few people think to do so.
Ross and colleagues decided to see what would happen if Medicare patients just took advantage of Walmart’s program offering $4 generic prescription drugs.
They looked at Walmart’s generic list for drugs commonly used to treat heart conditions, including high blood pressure and high cholesterol.
“Next, we used Medicare prescription drug plan data from June 2017 to determine beneficiary out-of-pocket costs for the lowest-priced dose of each drug in each plan,” they wrote. They got data on more than 2,000 Medicare prescription drug plans, including Medicare Advantage plans.
Overall, 21 percent of the plans asked patients to pay more out of pocket for the drugs than they would pay if they just got them for $4 at Walmart, the team reported.
Medicare Advantage plans were the most expensive for patients, Ross said. And the higher-tier programs were the worst, he found.
“Twenty percent of the time, at least, we should go to Walmart,” Ross said.
It doesn’t help that Medicare is very complicated. Patients can choose from dozens of different plans, depending on where they live, and it can take a great deal of research to find out which plan is most likely to cover a particular person’s health conditions for the least amount of money.
“Each Medicare drug plan has its own list of covered drugs (called a formulary),” the Center for Medicare and Medicaid Services says on its website.
“Many Medicare drug plans place drugs into different ‘tiers’ on their formularies. Drugs in each tier have a different cost. A drug in a lower tier will generally cost you less than a drug in a higher tier.”
Ross said it is time-consuming to compare one Medicare plan to another. But understanding one of the many plans tells people very little about what the others might offer.
“If you have read through the details and material for one plan, you have read through the details and materials for one plan. It’s very hard to compare,” he said.
In addition, any given plan may change the drugs that it covers and their prices throughout the year.
Ross said he studied Walmart because its $4 price for a 30-day supply of a generic drug seemed like the least expensive option, but other retailers also have inexpensive drug plans. Some grocery-based pharmacies even offer free drugs, such as antibiotics.
These offers get customers into the store, and the hope is that they’ll buy something else while they are there.
Ross said no patient should decide on a Medicare plan based solely on whether Walmart offers a better deal on prescriptions.
Switching plans might not be the best idea, because different plans provide different levels of coverage for doctor visits, medical procedures and other health needs.
“What we are showing is there may be some ways to save some money on some drugs by going to Walmart,” Ross said.
According to the Kaiser Family Foundation, about 90 percent of prescriptions filled in the U.S. are for generic drugs. Most people get health insurance through an employer, and the typical co-pay for a generic drug for a patient covered by employer-provided health insurance is $11, Kaiser found. For a brand-name drug, the average co-pay is $33.
Walmart is moving aggressively to get a big share of the U.S. health care market. Besides having large pharmacies, stores offer free health screenings and the company has said it intends to expand its locations of retail walk-in health clinics.
Walmart is also negotiating a closer partnership with health insurer Humana, including the possibility of buying it outright, according to CNBC.