Pharmacy discount cards can provide relief
Offers in mail often carry price fluctuations, some privacy concerns
12/9/2012So much about health care is changing these days, but one thing remains the same — pharmacy discount cards keep appearing in mailboxes, often regardless of whether you asked for them.
The latest round comes marked “RXrelief,” courtesy of the “Healthcare Alliance,” and a company called ScriptRelief. The blue-and-white discount card has been distributed nationwide in 2012, and has been causing some confusion among recipients because the unsolicited cards look a lot like an insurance card or some other type of “official” identification.
Pharmacy discount cards are not insurance — and most of them make that plain in the fine print — but with names such as MedSaverCard, RxSavingsPlus, and YourRxCard, it’s no wonder they can cause confusion.
When the cards become too confusing, regulators can step in. But on the whole, the cards, which have been around for several years, do more or less as they claim — offering savings of up to 75 percent on prescription medicine, primarily for those who lack health insurance.
What they don’t offer is any reliable or easy way to figure out which discount works best for your particular medication at your particular pharmacy.
“There is no uniform way to compare one card to another,” said attorney Edgar Dworsky, head of Massachusetts-based Consumer World, who has studied the cards. “Each one has set up its own type of pricing with a pharmacy benefits manager.”
Which means one card might get a better deal on Drug A at Rite Aid, while another gets a better deal on Drug B at CVS. But generally, customers only find that out after using the cards since the pharmacies won’t disclose the discount prices and deals they’ve negotiated with each individual card marketer.
“If your brother-in-law is a pharmacist, then maybe,” Mr. Dworsky joked.
Some card issuers offer price-comparison searches on their Web sites, but these can be unreliable, Mr. Dworsky said, because discounts are shifting from month to month — or even daily — depending on sales volume, customer traffic, and changes in the retail prices of the drugs.
The cards work the same way as AAA discounts. The company distributing the cards negotiates discounts with pharmacies on the promise of increased business and customer flow, just as AAA negotiates discounts with retailers, hotels, and restaurants. The card issuer takes a cut of that sale in the form of a service fee. Often, companies issuing the cards have nothing to do with health care, despite names like “Healthcare Alliance,” (which is essentially a consumer marketing company).
Why do the pharmacies sell a $100 prescription for $50 when a customer hands over a savings card issued by a marketing firm?
“One, they’re still making money,” said Rich Sagall, founder of NeedyMeds, one of the many card issuers. His organization is a nonprofit, meaning, he said, that its service-charge fees are cheaper than most.
Another reason, he said, is “peer pressure” — if all the other pharmacies are part of a particular “discount” network, it’s bad business to be the only one that doesn’t accept the card.
While the cards achieve their discounts in the same manner, they have different strategies for getting the plastic into consumers’ hands. Some, like the RXrelief card, rely on direct mailers. Others team up with cities, states, government agencies, or large employers to give the cards an air of “official” government endorsement.
If the card is tied to a government agency or municipal body, they often get a cut of the sale, as does the card issuer.
“Free” is key, Dr. Sagall said. Some discount-card issuers have tried charging customers for “access” to the network, but with so many free cards available, there’s no reason to pay for one, he said.
In exchange for the discounts, card users should know that many of the issuers are getting to know you and your medical history fairly intimately.
Still, for those who lack insurance — and discount cards cannot be used on top of insurance — the benefits outweigh the possible loss of privacy.
“For people with no insurance, it a great deal,” Dr. Sagall said.
The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Bill Toland is a reporter for the Post-Gazette.
Contact Bill Toland at: btoland@post-gazette.com