Prescription costs and how to reduce them

Prescription costs are a recurring and significant retirement expense, and a meaningful proportion of what people pay is avoidable.

How Part D is structured

Drug coverage under Medicare is provided through private plans with a defined benefit structure.

Historically the structure involved a deductible phase, an initial coverage phase, a coverage gap frequently called the doughnut hole, and a catastrophic phase.

Recent legislation has changed this structure significantly, including the introduction of an annual out-of-pocket cap and the option to spread costs across the year.

The specific amounts and phases change annually, which is one of the reasons an annual plan review matters.

The annual review

The single most valuable action available and one most people skip.

Plans change their formularies, tiers and premiums every year. A plan that covered your medication well this year may not next year.

During the annual enrolment period, the Medicare plan finder allows entry of your specific medications and pharmacies, and returns estimated total annual costs across available plans.

The differences between plans for the same person are frequently substantial, and the cheapest premium is often not the cheapest total.

Reducing what you pay

Generics. Where a generic equivalent exists, the saving is generally large. Generic drugs must meet bioequivalence standards, and for most medications the substitution is straightforward.

Worth asking specifically at each prescription rather than assuming it has been considered.

Therapeutic alternatives. Distinct from generics — a different drug in the same class that may be covered at a lower tier.

This is a clinical decision and it is worth raising with the prescriber, who frequently does not know what your plan covers.

Pharmacy choice. Plans have preferred pharmacies where cost sharing is lower, and prices for the same drug vary considerably between pharmacies even without insurance.

Ninety-day supplies, generally cheaper per unit than monthly fills, particularly by mail order.

Paying cash. Occasionally cheaper than the insured price, particularly with discount programmes or at pharmacies with low-cost generic lists.

Pharmacists were historically restricted from volunteering this information; that restriction has been removed, and it remains worth asking directly.

Manufacturer assistance programmes, which exist for many branded drugs and have income criteria that are sometimes more generous than expected.

The extra help programme, a federal subsidy for those with limited income and assets, which substantially reduces drug costs and is under-claimed.

The review with the prescriber

Worth doing periodically for reasons beyond cost.

Polypharmacy — the use of multiple medications simultaneously — is common in older adults and is associated with increased risk of interactions and adverse effects.

A periodic medication review, in which every drug is examined for whether it is still needed, is recommended in clinical guidance and does not happen automatically.

Bringing a complete list — including over-the-counter products and supplements — to an appointment is the practical starting point.

Deprescribing where appropriate reduces both risk and cost, and it requires a clinical decision rather than stopping medication independently.

What not to do

Worth stating clearly.

Cost-related non-adherence — skipping doses, splitting pills without advice, or not filling prescriptions because of cost — is documented as common and is associated with worse health outcomes and higher total costs.

Where cost is a barrier, telling the prescriber is the correct step. Clinicians generally have options and cannot use them if they do not know.

Importing medication from other countries carries legal and safety considerations that vary, and is not something to arrange without proper information.

Planning for it

Drug costs tend to rise with age as conditions accumulate.

A retirement budget that assumes current medication costs continuing unchanged for thirty years is likely to be optimistic, and building in growth is more realistic.

Keeping a current list

A practical habit worth adopting.

A single up-to-date list of every medication, dose and prescriber, including over-the-counter products and supplements.

Kept in a wallet and on a phone, and shared with a family member.

It makes the annual plan comparison straightforward, it makes medication reviews possible, and it is genuinely valuable in any emergency where someone else has to describe what you take.

Most people cannot produce this list accurately from memory, which is precisely the problem it solves.

General information only, not medical or financial advice. Never change or stop prescribed medication without consulting your prescriber. Plan rules and costs change annually.