Study finds prices for 16 commonly used prescription drugs varied substantially across the country and by type of retail pharmacy
How much you pay for a prescription drug at a pharmacy may vary greatly depending on what part of the country you live in and where you buy your prescriptions, according to a new study led by investigators at Brigham and Women’s Hospital. The team reports that cash prices — the amount that a consumer pays out of pocket — at independent pharmacies for a group of generic drugs ranged from eight times less expensive to eight times more expensive than the price for the exact same group of drugs at a large retail chain drug store. The team also analyzed results by zip code, finding more moderate differences in cash prices for prescriptions depending upon the type of pharmacy making the sale. Results of the study are published in Annals of Internal Medicine.
“Increasingly, consumers are paying out of pocket for prescription drugs. We set out to understand variation in the prices patients are paying for the drugs they are prescribed,” said corresponding author Jing Luo, MD, MPH, who conducted this research while serving as a faculty member at the Brigham and Harvard Medical School. Luo is now an assistant professor of Medicine at the University of Pittsburgh. “This was a very large study looking at drug prices at pharmacies across the country. We demonstrated wide variation in cash prices for the set of drugs we looked at. In general, when we stratified by zip code, prices were less expensive at big box pharmacies, but this difference was swamped by the variation we saw across the country.”
To conduct their study, Luo and colleagues in the Division of Pharmacoepidemiology and Pharmacoeconomics at the Brigham analyzed data provided by GoodRx, an online tool for comparing drug prices. The dataset included information from more than 60,000 pharmacies from the fall of 2015. The team analyzed cash prices for a one-month supply of 16 prescription drugs, including the top 10 generic prescription drugs by volume (albuterol, amlodipine, atorvastatin, hydrocodone–acetaminophen, L-thyroxine, lisinopril, metformin, metoprolol, omeprazole, and simvastatin) and the top six brand-name prescription drugs by sales (aripiprazole, fluticasone–salmeterol, rosuvastatin, duloxetine, glargine, and esomeprazole).
The team categorized pharmacies into large chains with at least 100 stores nationwide (such as Walgreens, CVS, and Rite Aid), small chains with four to 100 stores nationwide (such as Discount Drug Mart and Thrifty White), pharmacies based in a grocery store or supermarket (such as Kroger and Publix), big box pharmacies (such as Costco, Sam's, Walmart, and BJ's), and independent pharmacies. Specialty, infusion, compounding, long-term care pharmacies (such as those at hospitals) and mail-order services were not included in the analysis.
The mean cash prices for individual generic drugs varied widely. The team found the largest degree of variation among independent and small chain pharmacies; although cash prices at most independent pharmacies were higher than those at the largest chain pharmacy, some independent pharmacies had lower prices. In rare cases, the cash price for a group of generic drugs at one specific independent pharmacy could be several times less than that at the largest chain pharmacy. Most grocery-based and big box pharmacies had cash prices that were below those at the largest chain pharmacy, although some had prices that were higher. Large chain pharmacies had the least variation in cash prices. The team found a similar pattern for brand-name drugs, although with less degree of variation.
When the team stratified by zip code, they found that the cash price for the generic drugs at big box and grocery-based pharmacies was generally less than at large chain pharmacies. Cash prices at small chain and independent pharmacies were greater than at large chain pharmacies. Again, the team found that brand-name drugs followed a similar pattern, but to less of a degree of magnitude.
The authors note that their study could not take into account discount codes and price matching that independent and smaller pharmacies may be able to offer. Their study is also blind to zip codes where there may not be a large chain pharmacy to which prices could be compared.
Luo emphasizes that the study’s findings should not be interpreted to mean that consumers should simply go to big box pharmacies; instead, given the wide variation in drug pricing, consumers looking for the lowest price may find it helpful to comparison shop online.
“Online access to transparent, reliable drug prices may help consumers navigate variations in drug pricing and may mean lower out-of-pocket payments and greater prescription adherence,” said Luo.
Funding for this work was provided by Arnold Ventures. Luo reports salary support from Alosa Health and Arnold Ventures outside the submitted work.
Paper cited: Luo, J et al. “Variation in Prescription Drug Prices by Retail Pharmacy Type” Annals of Internal Medicine DOI: 10.7326/M18-1138
