How do Prescription Cards Like Good Rx Work?

Photo Courtesy of Christina Victoria Craft (Unsplash)

By Jon Aldrich

You may want to consider trying even if you are on Medicare or have good insurance.                                 

I have seen the commercials repeatedly over the last few years for GoodRx and have always wondered exactly how it works and if it could be worth using even if I am on Medicare or have good insurance in place. So, I decided to do some digging and see what I could discover.

Prescription discount cards, such as GoodRx, Capital Rx, NowRx, & Rx Savings Solutions are designed to help consumers save money on their prescription medications. These cards work by negotiating discounts with participating pharmacies and passing on the savings to the consumer.

To use a prescription discount card, the consumer typically searches for the medication they need on the GoodRx or other provider website or mobile app. They can then select a specific pharmacy location and choose the coupon that provides the best price for their prescription. The consumer then presents the discount card and their prescription at the pharmacy and pays the discounted price.

The amount of savings offered by a prescription discount card can vary depending on the medication, the pharmacy, and the location. Some cards may provide significant savings, while others may offer only a small discount. Additionally, some medications may not be eligible for discounts, and the savings offered may be limited to certain dosage forms or quantities. You can use Good Rx with no charge, but, of course, there is an upgrade available called Good Rx Gold, with monthly plans starting at $9.99 per month, but Good Rx claims even with the monthly fee, members still end up way ahead because of the even bigger discounts offered by the Gold plan.

One advantage of using a prescription discount card is that it can provide a way to save money on prescription medications without relying on insurance. This can be especially helpful for individuals who do not have insurance or whose insurance does not cover certain medications. However, it's important to note that the discounted prices offered by prescription discount cards can sometimes be lower than the prices negotiated by insurance companies. 

If you have insurance or Medicare, you can sometimes still use Good Rx if you find the coupon price is better than the amount you pay through your insurance. If you see that Good Rx has a cheaper price than you would get from your insurance than you would instruct your pharmacist to not run it through insurance and use the cash price with the coupon from the Good Rx site instead. It is all pretty simple.

Photo courtesy of Unsplash

 How Did These Prescription Cards Get Started?

The whole genre of Prescription Discount cards started back in 2011 when the Good Rx co-founder, Doug Hirsch was trying to fill an expensive prescription and decided to shop around for a better price, but this took some time and the genesis for having a website do the searching for you was born and Good Rx came to fruition. 

The Good Rx and similar companies business model is driven by the inefficiencies in pharmacies usual & customary (U&C) retail list price which is what they charge to customers paying with cash. This U&C price for scripts can vary greatly among individual pharmacies especially with generic drugs.  One study that compared two generic antibiotics discovered that the cash prices varied anywhere from $4 to $229 and from $2 to $134 for the two drugs! This is where Good Rx comes into play, by making it very easy to find the lowest cost pharmacy in your area. 

As you may imagine, pharmacies must hate these benefit cards because they allow consumers to save a lot of money, which can really eat into their profits. Of course, this can hurt the small Mom & Pop pharmacies, while the Walgreens of the world can make money elsewhere in their ubiquitous stores that you find on almost every corner.

I am not going to go into the details of how to actually use Good Rx and other cards, but you can go here and see for yourself. 

I was also curious to see how the Good Rx stock   (GDRX) has performed, and let’s just say they are doing a real good job of discounting the stock price as well. It is down 81% over the last year. Ouch! I didn’t really look into the reasons why it has tanked so much, but it is possibly due to all the competition that has popped up in this space the last few years.

Here are the key takeaways from all this:

1. Good Rx and similar cards cannot be used in combination with private insurance or Medicare, but can be used in their place if the Good Rx price is better.
2. You might consider using a Prescription card instead of Medicare or insurance when they don’t cover a script or when you won’t reach your annual insurance deductible or are in the “donut hole” of your Medicare coverage
3. Good Rx and other Prescription cards drug prices are often cheaper than Medicare or private insurance co-pays, so it may be worth your time to try them.
4. I was surprised at how many different cards are now available.