Superstar Drugs Debut as Generics
A dose by any other name works as well -- and costs less.
By Thomas M. Anderson, Associate Editor
From Kiplinger's Personal Finance magazine, January 2007
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Drug prices vary depending on how much you buy and in what form. Tablets, for example, could be cheaper than capsules. And a 90-day supply may cost less than the typical 30-day prescription. Ask your doctor for a prescription you can buy in bulk, and talk to your pharmacist about the cheapest and safest form of each medication. With some medicines, you might save by buying large pills and splitting them into smaller doses. But check with your doctor or pharmacist to see if pill-splitting is appropriate for your prescription.
Don't be shy about asking your pharmacy if it can meet or beat a competitor's price. You might get a bargain and save yourself the hassle of moving your business elsewhere.
North of the border
Sure, you can save up to half the price of brand-name drugs if you buy from pharmacies outside the U.S. But importing medications from any foreign country except Canada is illegal. In Canada, purchases must be made in person with a valid U.S. prescription approved by a Canadian doctor.
That legal exception does not extend to buying Canadian drugs over the Internet. It's illegal to order drugs from Canada online, but U.S. Customs and Border Protection says it will no longer routinely seize packages of non-narcotic prescription drugs mailed from Canadian pharmacies. It will, however, continue to conduct random searches for counterfeit medications.
Some consumers, particularly those who rely on brand-name drugs that do not have generic alternatives, think the savings available on imported drugs is worth the risk. If you are considering this route, shop only at Canadian pharmacies and Web sites, says Steven Findlay, managing editor of Consumer Reports Best Buy Drugs. There's less chance of getting ripped off with fake drugs or endangering your health with weak or tainted medicine, Findlay says.
Some Canadian sites have been vetted by state governments and scrutinized by federal regulators. Minnesota, New Hampshire, Washington and Wisconsin, for example, have started programs to help state workers and other residents buy low-cost drugs from Canada (go to www.rx.wa.gov or www.minnesotarxconnect.com).
But it's not worth the trip just to buy generic drugs. "People aren't going to Canada to save $6," says Stephen Schondelmeyer, director of the PRIME Institute, which studies the economics of the pharmaceutical industry.
Help from Uncle Sam
You don't need to use your passport or test the legal boundaries to save on prescription drugs. All you have to do is sign up for a flexible spending account, if your employer offers one.
With an FSA, you can set aside pretax dollars to spend on out-of-pocket medical expenses, including over-the-counter and prescription drugs. So if your medications cost $1,500 per year and you're in the 25% tax bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your purchases. (Dodging state income taxes saves you even more.)
There is a catch: With an FSA, you lose what you don't use by the end of the plan year. But many employers give their workers until March 15 of the following year to empty their flex accounts. Check to see if your plan is one of them.