On May 15, 2024, this author wrote an article, Medication Costs, identifying the huge problem of excess costs for medications. Not surprisingly, 1.5 years later, this is no better and likely worse. That article reviewed the cost of atorvastatin in many pharmacies locally. It speculates that if this 1 medicine could be bought at a more competitive price, the American consumer would save $4.7 billion on this alone. At the conclusion of 2025, data which this author reviewed say that Americans will pay just under $900 billion on prescription pharmaceuticals this year.
What to do, what to do?
In this particular case, a bit of common sense goes a long way. The model to be emulated involves the corner filling station in almost every city, town, and rural region. As one goes mile after mile, fuel prices are displayed for typically all grades of gasoline (and diesel, if offered) which are easily seen from the road. Often times, it is possible to find one or more stations per mile traveled. Indeed, the average traveler cannot complain about the cost of fueling his vehicle at a given station if both up the street and down the street the prices are typically just a few percentage points away from one another. The market works reasonably well in this instance since prices are readily available. The consumer has some power.
For sensible purchasing of medications, there currently is no easy way of comparing the cost of one medication at this pharmacy or that pharmacy. Contacting a modern pharmacy by telephone for prices would likely overwhelm the already overworked pharmacists who are busy servicing medication needs and giving advice. The same impediment would be worse if one were to try to drive to all the pharmacies and ask for the price at the counter. This would be prohibitively difficult.
Also of note, 91% of prescriptions are generic leaving 9% of prescriptions as brand-name (according to the FDA). This is important because it turns out that generics, while cheaper than brand-name medications, are more likely to be wildly inflated (percentagewise) in price than the more expensive brand-name medications.
In fairness, 1 website does 50% of what this author envisions to be a major improvement for the medical consumer. This is GoodRx.com. This allows one to see a number of pharmacies in the immediate area and what it would cost for a given medicine, dose size, route of administration, frequency of administration, and the number of days to be given. That is a good start. Just with this 1 site, one can see the cash price of the same purchase at a number of pharmacies. Locally, one pharmacy can be close to 2x as costly as another for atorvastatin.
Let us discuss the next step in cost savings at a hypothetical, single-payer website called MedRx.com. At that site, a patient or provider’s office could inquire regarding one or multiple prescriptions at the same time. As before, one would supply the name of the medicine, dose size, and all the rest for one or multiple prescriptions. The MedRx.com would then send out that order to the local pharmacies to solicit bids by computer.
Yes, you read that right, the pharmacies would have to bid for each and every prescription. To reply instantly to requests with a best price will greatly reduce the excessive margins and certainly stop the circumstance where one pharmacy is charging multiples more than the other in a local area for the same medication. That pharmacy charging multiples will get no business and go bankrupt!
Some pharmacies might continue a fixed pricing system and not adjust their prices according to market pressure. The more sophisticated pharmacies would factor in dynamic variables, e.g. how much extra inventory remained. On that basis, it might bid more competitively (i.e., offer lower prices). Remember that from an operational point of view, each pharmacy processes each prescription as a “middleman”. They secure the same medications from the same sources. Thus, as a general statement, the quality of medications is identical (as guaranteed by the Food and Drug Administration).
Once MedRx.com selects the winning bid, this is returned to the patient or provider (along with the results of other bidders, if requested). At that point, the bid could be “accepted”, this time with the patient’s name and related information. The bid would expire after a preordained time. By forcing all the pharmacies to compete, the “cash” price would very efficiently be reduced by market forces. This author’s estimate would be that prices would quickly be reduced by an average of 50%, possibly more. That translates to hundreds of billions of dollars of savings per year for the American patient.
To stay pragmatic, if the pharmacy were the only one in a large radius (i.e., a rural area), the MedRx.com would not be applicable. A remote pharmacy is usually smaller and has a higher overhead, thus meriting some latitude.
With today’s computers, any pharmacy could easily and affordably hold the names of hundreds of thousands of medicines along with their costs at each and every pharmacy location (if it were, for example, a chain). With a little additional programming, the computers could change prices quickly to reflect changes in market dynamics (e.g., if the wholesaler sold the pharmacy a medication at a lower price, its computer could follow programming guidelines to reduce the price to the consumer automatically with the goal of increasing market share).
By implementing the above, the American consumer would have great power to reduce the outlay for medications. Of note, this technique could be applied also to nonprescription medication such as acetaminophen and ibuprofen (and of course, many more). Reducing costs only requires some creativity and an intolerance of the status quo. We can do this.