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Large Chain Pharmacies Have Lowest Cash Prices for Generics, Less Variation

Analysis  |  By Jack O'Brien  
   September 30, 2019

Consumers might be better off price shopping for generic prescription drugs, according to a new study.

Independent and small chain pharmacies had higher cash prices for generic prescription drugs compared to large chain pharmacies, according to a study published in the Annals of Internal Medicine Monday afternoon.

The study, conducted by Brigham and Women's Hospital in coordination with data from GoodRx, examined cash prices for six on-patent and 10 off-patent generic drugs across different pharmacies in the same zip code during 2015.

Overall, grocery store pharmacies, big box pharmacies, and large chain pharmacies had both lower cash prices for generic drugs and less price variation for brand name drugs compared to independent and small chain pharmacies.

On average, large chain pharmacies had cash prices that varied between two-fold and less than half of the standardized reference price for the largest chain pharmacy. Meanwhile, independent pharmacies had prices that ranged from 16-fold to one-eighth of the reference price.

Mean cash prices for individual generic drugs ranged from $7 for 25 mg of metoprolol at a big box pharmacy to $170 for 20 mg of atorvastatin at an independent pharmacy. 

High prescription drug prices have been a pressing one of the most pressing healthcare issues for consumers, leading to legislative action in Washington, but also increasingly demands the attention of provider executives as well.  

Related: Why Your Health System Needs a Chief Pharmacy Officer

Related: Hospitals Look at Retail Pharmacies With Renewed Interest

Jing Luo, MD, MPH, an assistant professor of medicine at the University of Pittsburgh, was the lead author of the study while working at Brigham and Women's Hospital.

Luo told HealthLeaders that increased price transparency and price shopping at the local level may assist consumers in finding generic prescription drugs at lower prices.

"Part of it might be that comparison shopping for patients of [an organization's] health plan or health system will probably go out and fill a prescription at a retail pharmacy counter," Luo said. "The bottom line is that it might make sense for [consumers] to shop around a little bit and not just go to the [pharmacy] that they live closest to, especially for generic drugs."

The study concluded that 8% of Americans who lack prescription drug coverage could benefit from an online tool to assist with price transparency related to generic drugs. 

The study also included a note that the findings did not account for "price matching, coupons or other discount programs" available at certain pharmacies.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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