Cost Plus Drugs Might Save Medicare Members Money — With a Catch

Invoice Hearn’s treatment to deal with his gentle power obstructive pulmonary illness, or COPD, would price him $275 monthly from CVS Pharmacy by his Medicare Half D prescription drug plan. However the 69-year-old retiree dwelling in Knoxville, Tennessee, will get a generic model delivered from a brand new on-line pharmacy, as a substitute. It prices lots of of {dollars} much less.

“I’d learn some about Costplusdrugs.com on Twitter, so I made a decision to test it out,” Hearn stated in an electronic mail. “Their web site may be very simple to make use of to test availability and costs, and I used to be shocked to discover a $75 monthly worth for a similar treatment (as a generic). The worth was lowered to $60.50 final 12 months.”

Price Plus Medication can supply important financial savings on sure prescribed drugs, however there are some downsides, too — notably for individuals with Medicare. Right here’s what Medicare beneficiaries ought to find out about this on-line pharmacy.

The Mark Cuban Price Plus Drug Co., or Price Plus Medication, is a web based pharmacy for generic drugs. The corporate, which launched in January 2022, takes its identify from investor Mark Cuban, a billionaire entrepreneur and philanthropist.

Price Plus Medication says it sells “greater than 700 of probably the most generally prescribed generic drugs.” It doesn’t promote any brand-name medicine or specialty medicine.

Price Plus Medication is notable for providing low-cost drugs with clear pricing. “Each product we promote is priced precisely the identical means: our price plus 15%, plus the pharmacy charge, if any,” the corporate’s web site says about its pricing mannequin.

Price Plus Medication provides this instance for a 30-count provide of 400 milligrams of Imatinib, a most cancers drug:

• Manufacturing price: $31.20.

• 15% markup: $4.80 (rounded per capsule).

• Pharmacy labor (the “pharmacy charge”): $3.

Together with the delivery, that may be $44 monthly.

This worth provides financial savings of greater than $9,600 versus different corporations’ retail costs, the corporate says. That comparability might be based mostly on brand-name Gleevec, which might price $10,000 or extra monthly at retail. Generic Imatinib is less expensive, however it could possibly nonetheless be nicely over $100 monthly from main retail pharmacies with a Medicare prescription drug plan.

“We’re cheaper than Medicare copays, so we’re an awesome place for Medicare recipients to purchase drugs,” Mark Cuban wrote in a Twitter direct message.

If you wish to purchase these lower-cost drugs from Price Plus Medication, your Medicare plan received’t be concerned. Price Plus Medication doesn’t invoice Medicare, whether or not you’ve a stand-alone Medicare Half D plan or a Medicare Benefit plan with prescription drug protection. You’d must pay for drugs from Price Plus Medication out of your individual pocket, however it could be nicely price doing.

You don’t get any credit score towards your Half D deductible whenever you fill a prescription by Price Plus Medication. You solely meet the Half D deductible by paying for medicine your plan is overlaying, and Price Plus Medication doesn’t invoice Medicare Half D plans.

You may nonetheless meet your Medicare Half D deductible by paying for different medicine your plan covers. For instance, Price Plus Medication doesn’t promote brand-name medicine, so you can fill brand-name prescriptions by your Half D plan and meet the deductible that means.

In the event you fill most or your entire prescriptions by Price Plus Medication, although, you’re doubtlessly lacking out on a whole lot of credit score towards your deductible. You continue to must pay your premiums, however till you hit the deductible, your Medicare Half D plan doesn’t pay in your medicine.

In the event you take principally or solely generic medicine, it may be tempting to make use of Price Plus Medication and go with out Medicare Half D protection. Nonetheless, you can face the Medicare Half D late enrollment penalty. You’ll have to have both Medicare Half D or one other sort of creditable protection (comparable to an employer plan) that’s not less than nearly as good as Medicare Half D to keep away from being penalized.

Even should you may lower your expenses by utilizing Price Plus Medication and skipping Medicare Half D, you’d face the Half D penalty should you ever enroll (or signal again up) for Medicare Half D.

The Medicare Half D late enrollment penalty is 1% of the nationwide base beneficiary premium — $32.74 monthly in 2023 — for every full month that you just didn’t have qualifying prescription drug protection, rounded to the closest 10 cents.

For instance, should you went with out protection for 2 years, or 24 months, your month-to-month penalty could be 24% of $32.74, or $7.90 (rounded to the closest 10 cents), in 2023. That quantity is added to your premiums each month. It could go up or down in subsequent years based mostly on the nationwide base beneficiary premium, however it doesn’t ever go away.

Price Plus Medication isn’t solely against working with insurance coverage corporations. As of February 2023, Price Plus Medication solely works with one insurance coverage plan — Capital Blue Cross — however the firm’s web site says “we will likely be including extra insurance coverage within the coming months.”

Cuban described the corporate in a Twitter direct message as “keen and capable of combine” with authorities packages like Medicare, and added “however we have now not had these discussions but.”

If Medicare or Medicare Benefit corporations made agreements with Price Plus Medication, it may critically shake up drug pricing. “If we may promote to Medicare, we may save taxpayers tens of billions of {dollars},” Cuban wrote.

A 2022 examine revealed within the Annals of Inner Medication estimates that Medicare may have saved about $3.3 billion in 2020 if it had purchased a subset of medicine obtainable from Price Plus Medication on the firm’s charges. (For context, the overall Medicare Half D funds for fiscal 12 months 2020 was about $89 billion, in response to the Congressional Finances Workplace.)

Medicare beneficiaries had a mean of 54 prescriptions per 12 months as of 2018, in response to information evaluation by the Congressional Finances Workplace. Within the information, one prescription equals a 30-day provide, in order that’s about 4.5 prescription fills monthly. Saving cash on even a portion of these could possibly be an enormous deal for Medicare beneficiaries.

Price Plus Medication could possibly be choice for potential financial savings on generic medicine, even for individuals who already produce other Medicare prescription drug protection.

Nonetheless, there are additionally some Medicare-specific downsides to Price Plus Medication. Word these further concerns:

• Prescriptions stuffed by Price Plus Medication don’t depend towards the Medicare Half D deductible.

• Price Plus Medication doesn’t promote brand-name medicine (which are usually the costliest).

• You’d owe steep and everlasting penalties for going with out Medicare Half D protection, so it’s not a good suggestion to drop your Half D plan, even when you may get cheaper treatment from Price Plus Medication.

Briefly, should you take a drug with a generic model, it’s price checking the value on Price Plus Medication to see whether or not you can doubtlessly lower your expenses. However Price Plus Medication isn’t a substitute for Medicare Half D, so take care to not run afoul of penalties that might add as much as greater than you save on prescriptions.