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How do Prescription Discount Cards Work? An Honest Look

Prescription Discount Cards

It’s no secret: prescription drugs are expensive. According to the U.S. Bureau of Labor Statistics, prescription prices in 2021 are 1,608.52% higher than they were in 1935 (yes, you read that right). 

It comes at no surprise then that more and more people are turning to prescription discount cards (also known as Rx savings cards, and many other similar names) to lower the amount of money they have to pay on their medications. 

These card programs can save you money on prescriptions and are supposedly free to use, so what’s not to love? Well, as the famous adage goes, “there’s no such thing as a free lunch,” and prescription discount cards are no exception. 

Before you sign up for one of these cards, it’s important to understand how they work and why they are “free” so you can make an informed decision about your health and privacy. 

 

Understanding Rx Discount Cards

 

Pharmacies are like all other businesses: they need to attract and retain customers to be successful. Given the high prices of prescriptions, it makes sense that some pharmacies (usually big-box pharmacies) try to do this by offering discounts on certain prescriptions. 

In order to provide these discounts, they partner with prescription discount companies (such as GoodRx, SingleCare, and many others) who negotiate prices on medications (often with the help of pharmacy benefit managers) and market these discounts to help drive traffic to the pharmacy. 

As compensation for this increased traffic and exposure, the Rx discount companies receive a small cut of the profit every time a coupon is used. This cut, combined with the lowered price of the prescription, often means that the pharmacy receives little to no profit on the prescription sale (and they sometimes even lose money). 

While big-box pharmacies can afford to lose money or break even on prescription sales for the sake of bringing in new customers, most independently owned pharmacies cannot. But there are also other reasons why many independent pharmacies steer clear from prescription discount programs. 

 

1. Privacy Concerns with Rx Discount Companies

 

Back in February of 2020, Consumer Reports released a shocking article that exposed privacy concerns with the popular prescription discount company GoodRx. 

Consumer Reports had discovered that GoodRx was selling users’ personal information to Google, Facebook, and other major companies – troubling news given the sensitive nature of medical information. 

After the article was published, GoodRx swiftly announced they would stop sharing personal medical information with Facebook, appointed a new vice president of data privacy, and gave users improved privacy features. 

Although these changes were a great step toward better user privacy in the prescription discount industry, there is still a lot of work to be done. 

Because these companies are direct-to-consumer they are not subject to the privacy standards of the Health Insurance Portability and Accountability Act (HIPAA) and are therefore legally allowed to share and sell users’ personal information. In fact, many of these companies depend on the money they make from selling this data. 

While GoodRx took it upon themselves to protect user privacy (even when they didn’t have to), not all prescription discount companies will do the same. And while GoodRx has agreed to stop sharing medical information, they may still share non-medical personal information with third-party companies. 

Pharmacies, on the other hand, are subject to HIPAA privacy standards. So when you purchase a prescription through a pharmacy without using one of these discount cards, either via insurance or out-of-pocket, you can be rest assured that all of your information will be safe. 

 

2. Rx Discount Cards Don’t Always Save You Money

 

Prescription coupons are enticing given the high cost (and high demand) of many medications. After all, who doesn’t want to save 80% on their prescriptions? 

However, if you have existing health insurance, Rx discount cards may not save you money – in fact, if you aren’t careful, they can even cost you more. 

One of the catches with prescription coupons is that in order for you to take advantage of them, you have to pay out of pocket. These out-of-pocket prices, though discounted, can actually end up being higher than the insured prices for identical or equivalent medications. 

Moreover, while prescription discount cards can be valuable for those without insurance, they only cover certain medications. As you can guess, this can cause serious problems for uninsured people who need a prescription not covered by one of these discount programs. 

Given these risks, it is best to use prescription discount cards only as a supplemental resource to your existing health insurance plan. Sometimes it may be cheaper to pay out of pocket using one of these discount cards, but a health insurance plan is a much more reliable means of lowering the costs on your prescriptions. 

 

So, Should I Use a Prescription Discount Card?

 

The short answer: it depends on you. 

One of the biggest drawbacks when using prescription discount cards is that you have limited control over your privacy. If you value your privacy, medical or otherwise, then enrolling in one of these discount programs may not be the best choice. 

Because these coupons are free to the end user, Rx discount companies have to find other ways to make money. Sometimes, this means selling the personal information of coupon users to third-party companies (usually for the sake of advertising and research); and almost all of the time, this means taking a percentage of the profit from pharmacies each time a coupon is used to buy a prescription, leaving little to no profit. 

However, if you are okay with some of your personal information being shared, then a prescription discount card can be a valuable resource when used right. But when using one of these cards, keep in mind the following three things:

  • Most independent pharmacies do not participate in these card programs 
  • You can’t use your health insurance to cover the cost when redeeming one of these coupons (meaning that insured prices may actually be cheaper than the “discounted” prices being advertised by the Rx card company)
  • Only certain medications are discounted at certain times (making it risky to rely solely on these card programs)

As you can see, prescription discount cards are far from “free.” In reality, they come at the cost of reduced privacy and increased risk for users, not to mention the negative impact they have on local, independently owned pharmacies.  

Sometimes, the benefits of these discount cards may outweigh the costs – especially if you are underinsured – but that is a decision you will have to make for yourself. 

About Community Pharmacy

Community Pharmacy is a locally and family owned pharmacy that has been serving Texas since 1982. With locations in Denton, Corinth, Lewisville, and Flower Mound, we strive to provide an effortless pharmacy experience that patients can look forward to. Our caring and knowledgeable staff is committed to providing the highest quality service with integrity and compassion to meet the needs of those we serve.

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