How Retirees Can Negotiate Drug Prices

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A Squared Away reader wrote recently that he and his wife saved $2,400 a year by paying cash for their medications.   

When a pharmacy sells a prescription drug to a customer, the health insurer reimburses the pharmacy at a negotiated rate that covers its cost for the drug, its dispensing fees, and any additional markup. It’s often the case that a patient’s copayment exceeds the pharmacy’s reimbursement, resulting in an overcharge in the copayment. More than one in four copayments were overcharges in a March analysis in the Journal of the American Medical Association of some 4,000 outpatient drugs and
9 million insurance claims by people of all ages.

We asked Mohamed A. Jalloh in Napa, California, to guide consumers on how to reduce their costs. He is a pharmacist, assistant professor at the Touro University California College of Pharmacy, and a spokesman for the American Pharmacists Association. 

Question: How can retirees access their option to pay a cash price for a prescription if it is lower than their Part D or Medicare Advantage plan copayment?

Jalloh: The big picture is that elderly patients should work with a pharmacist to see if they can get a better deal. If you process a prescription through your insurance – whether under an employer’s health insurance or Medicare drug coverage – the price may be higher than paying straight cash for the medication. Anyone can do this. But I imagine it helps seniors the most because they’re the ones taking the most medications.

The key is to ask the pharmacist to go over your medications with you. Do a medication check-up once a year. That’s the best time to see if a pharmacist can get a better deal for you.

Q. Is it common practice to negotiate a cash price?

Jalloh: I think that people do not know about this option and would really appreciate learning about it. It’s also important to remember that, in most cases, people are still going to get a better deal with insurance by paying, say, a $5 or $10 drug copay.

But if patients want to investigate, the most likely options are meds that have been around a long time like blood pressure drugs, blood thinners, cholesterol medications, and ibuprofen. These older drugs have generics, and there’s a better chance of getting a good cash price.

Q: Retirees must explicitly ask the pharmacist if the cash price is lower. But my research shows that 26 states – including Arizona, Florida, and Texas – require that pharmacists volunteer this information. What’s going on here?

Jalloh: Typically the pharmacy company, say CVS or Walgreens, will clarify to their pharmacists that they should not communicate this information unless the patient asks. However, some states have removed this gag order so the pharmacist will volunteer it. I recommend that the patient ask this question: What can I do to get the best price? Another way to ask is: Can you give me comparisons for how much I would pay for medications using insurance and how much would I pay in cash, without using my insurance?

Q: Why are prescriptions sometimes cheaper when seniors pay with cash?

Jalloh: The insurance company and the pharmacy company are separate entities, and each one is paying and charging different prices for the same medications. Insurance companies set the patients’ copayments, but the price the pharmacy pays to purchase the medication can be lower depending on the insurance plan.

Q: When is a lower cash price not possible? 

Jalloh: It’s possible except in cases where people do not pay anything for a prescription processed through insurance, or if they hit the prescription drug deductible on their insurance.

Q: Is this option available at all pharmacies?

Jalloh: Yes. Anyone who processes your drug benefit under your health insurance can do these price comparisons. Based on the pharmacist’s costs and pricing, I’m assuming they make some profit as well when they sell a drug for cash.  Keep in mind that the same medication can be a different cash price depending on the pharmacy you go to.

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Everything in the above is correct. We were paying $200/mo ($600/90 day supply) from our Plan D. Our pharmacist is our neighbor. She said that the 90 day prescriptions for my wife and myself, for ALL of our medications cost her $14. You read that right- $14.00! She advised us to drop the Plan D. We did.

If we needed a more expensive prescription filled she would find us coupons or get help via manufacturer.

Our Plan D provider didn’t want to let us drop it, but we did. We suggest other seniors do the same. Talk to your pharmacist. They will be glad to help.

    Dave G.

    Please read my comment below. Your pharmacist neighbor gave you poor advice about dropping Part D coverage. If you take few drugs or inexpensive drugs, it is worth your while to enroll in your area’s least expensive Part D plan. I’m in one myself, taking no drugs and pay $16 a month. I have no deductible for Tier 1 or Tier 2 generics and some are either free or a minimal $2 co-pay. Why risk having no coverage should you need an expensive drug later in the year? Plus, you’ll be subject to a permanent “late enrollment” penalty if you enroll in a Part D later.

    We are in the Annual Election Period (AEP) for Part D now. You can research plans and costs, including co-pays using the Plan Finder tool at Good luck!

      Garrett Ball

      It’s actually for researching Part D options. is a commercial site promoting only certain plans. The .gov site is the Medicare site for viewing all Part D plans.

    Janey Phillips

    I absolutely agree with paying cash when it is cheaper. However I would not drop my Part D coverage but rather go down to the cheapest plan I could find at the next open enrollment, which is right now. If you drop Part D coverage and try to restart it later when perhaps you require a very expensive medication for a new medical condition, you will end up paying a premium penalty if I understand the rules right.

Dave Gardner

Very sorry, but this is misguided and potentially expensive bad advice. First, you can still negotiate drug prices without dropping your Medicare Part D. Having Part D coverage or paying cash are NOT mutually exclusive! Instead, simply enroll in the lowest cost Part D plan in your area, which can serve as a “place holder” plan. Most areas have at least two or three such plans with premiums as low as $14 per month. Some plans even have $0 copays for Tier 1 or even some Tier 2 generics. Hard to negotiate a price lower than zero. More importantly, staying enrolled in a low cost drug plan still provides valuable protection should you need an expensive drug during the year. Even the lowest cost Part D plan must meet CMS minimums and include at least 2 drugs in every therapeutic class. Also keep in mind, the “donut hole” gap has been closed for brands om 2019, so you’ll pay no more than 25% of the cost of brands even beyond the Initial Coverage Limit. Keep in mind, if not in a plan you will be locked-out of drug coverage after the Annual Enrollment Period (AEP) ends Dec. 7 until next year. Even then you will be subject to a permanent penalty for failure to stay enrolled in a creditable drug plan. Even some generics on Tier 3 can run $300 a month or more.

So why risk all this to avoid a $14 per month premium?? It simply makes no sense….penny wise but pound foolish advice.

By all means, if you can buy a drug cheaper than your Part D plan copayment, go right ahead. Simply don’t present your Medicare drug card at the pharmacy counter. And take advantage of online coupons at websites like Be an informed consumer, not a misinformed one.

Bill F

Be very careful about dropping Part D. There is a 1% penalty for each month that you have MediCare and don’t have Part D and it never goes away. For example, if you go without Part D for two years you will have a 24% surcharge once you do sign up. The smarter option would be to sign up for a no cost or very low cost Plan D and the use a program like GoodRx for huge discounts and just pay cash for your meds and don’t even use your Part D. This way you have no penalty and can still pay cash for your drugs at VERY low prices. Add the GoodRx app. and type in your meds and see how much you can save.

Tom in Texas

Jack, glad you were able to save some buck$ by paying cash. But note, that if in the future that you need an expensive medication and want to choose a Medicare Part D Plan, you’ll be penalized 1 percent for every full month that you were eligible but went without Plan D. That total percentage is then multiplied by what’s called the “national base beneficiary premium,” which is currently about $35. That amount will be added to your monthly premium…every month It’s not a one-time penalty — you’ll pay it for the rest of your life.

Kim Blanton

Wow! Thanks for all the additional – and IMPORTANT – information about the penalty for my other readers.
Sincerely, Kim


My physician just ordered me to take Eliquis for AFIB. Cost my pharmacist $428/60 pills/1 months supply. My Plan D would NOT cover this drug. Other plans would not cover it either, or until it becomes generic. My pharmacist again was able to get the manufacturer to cover the first $3,800. She also got me coupons for the rest so I am paying $20/month for Eliquis.

    Dave G.

    You can always request a “formulary exception” if you need a drug not covered by your plan. Your doctor sends a 1-page standard request form to your drug plan. Standard response time is 72 hrs. or 24 hrs. if urgent. About 30 percent of requests are approved. The request must be medically necessary and no other drugs on formulary able to treat the condition.

    That said, I have several clients whose Part D covers Eliquis. Use this AEP to shop for coverage using the plan finder tool at

    Dave G.

    I just went online to and plugged in my home zip code to search Eliquis for 2019 Part D plans. Result? 24 out of 25 available plan in my state cover it! The only one that did not was AARP Medicare Rx Walgreens. Just because your plan for 2018 didn’t cover it doesn’t mean you can’t find one that does for 2019. Here are the results:
    Plan: SilverScript Choice (PDP)
    CVS Pharmacy #06765 – Preferred Retail Cost Sharing / Drug Costs During Coverage Levels
    Eliquis TAB 5MG 30 Tabs
    Full Cost: $422.78 Every 1 Month
    Copay in Initial Coverage Period $46.00
    Copay in Coverage Gap $105.70
    Copay at Catastrophic $21.14

    Dave G.

    I just went online to and plugged in my home zip code to search Eliquis for 2019 Part D plans. Result? 24 out of 25 available plan in my state cover it! The only one that did not was AARP Medicare Rx Walgreens. Just because your plan for 2018 didn’t cover it doesn’t mean you can’t find one that does for 2019. Here are the results:
    Plan: SilverScript Choice (PDP)
    CVS Pharmacy #06765 – Preferred Retail Cost Sharing / Drug Costs During Coverage Levels
    Eliquis TAB 5MG 30 Tabs
    Full Cost: $422.78 Every 1 Month
    Copay in Initial Coverage Period $46.00
    Copay in Coverage Gap $105.70
    Copay at Catastrophic $21.14

Edward Hoffer MD

Agree whole-heartedly NOT to drop Part D. You never know when an expensive medicine is just around the corner. Several pharmacy chains have a list of drugs they will sell you for $10 for 90 days – ask your doctor to pick one from one of these lists if appropriate. If you want the gory details on Big Pharma and a lot of what else is wrong with our system, read my new book Prescription for Bankruptcy, available on Amazon. Edward Hoffer MD

Paul Rubinfeld

If you are veteran apply for your VA health benefit! It can be a substitute for a Medicare D Plan in that it is creditable coverage.If you ever need Medicare D coverage there will not be a penalty when you sign up. Should you ever need one of the very expensive meds the VA may be your best source. Added bonus — I get a 10% vet benefit when I flash my VA card at Home Depot.

Paul Brustowicz

Buying prescription drugs is as about as bad as buying a car. I discovered from my Express Scripts website that by driving five minutes to Walgreens I could get my meds for less than what express scripts charged for delivering to my door.

I like the idea of using a low premium plan for Part D as a place holder, then pricing product at the pharmacy. Of course none of the pharmacies would talk about price until and unless an actual prescription was sent to them.
Wonder what will happen when CVS merges with Aetna?


My pharmacy has the cash price on the receipt.

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