Sticker shock at the pharmacy window has resulted in increased public pressure to stem drug costs.

Experts agree the health-care reform bill provides some cost savings for the average consumer now, and potentially relief long-term, but there are some caveats.

Although the reform does help reduce some drug costs, there are steps you can take to reduce costs.  

The Donut Hole Rebate

The new legislation offers some immediate assistance to targeted patient groups, particularly low-income patients who require financial assistance and Medicare-Part D participants.  

Medicare-Part D patients will receive a tax-free $250 reimbursement this year when they reach the donut hole, which begins when a patient and the plan spend $2,830 for medications. You pay full cost until your drug expenses reach $4,550, then catastrophic coverage kicks in till the end of 2010.

Next year, people who fall in the donut hole will get a 50% discount on brand-name and biologic drugs and a 7% discount on generics. After 2011, the discounts will grow larger until 2020, when nobody will pay more than 25% of the cost of any drugs in the donut hole.

While the perk sends a positive message to consumers, some experts concede the $250 reimbursement is a small sum compared to drug costs, particularly brand names, specialty drugs or biologics that are used for chronic conditions with high patient-care needs (e.g., asthma, diabetes, cancer and heart disease). 

“It’s like bailing out a boat with a sieve,” said Stephen W. Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota who analyzes drug prices for AARP. “There are no mechanisms in the reform bill to control prices. Drug costs could continue to escalate so that in three or four years these benefits will be wiped out.”

Since the bill was passed, drug manufacturers have reportedly increased the price on name-brand drugs by close to 10%, at least on list price, which may be partially offset for most drugs by rebates.

Many regard the increases as a, “make hay while the sun shines approach,” said Bob Merold, a consultant at Knowledgent, a management consulting firm. “Fortunately, the bill and related forces are trying to increase buyer pressure.”

Drug Companies Face Increased Costs

New requirements in the health law, like the establishment of a comparative effectiveness research board to prove a drug’s effectiveness, will force drugmakers to spend money they weren’t in the past.

 “This will likely pressure pharma to increase costs to patients,” said Knowledgent’s Michael Barnes. “There are some very competing forces at work.”

Steven Findlay, senior health policy analyst at Consumer’s Union, said the reform requirements for pharma were not as much as some advocates wanted. For example: biologic manufacturers are allowed a 12-year exclusivity period before a competitive generic can be developed.

Beyond the Legislation 

On a positive note, health-care reform promotes patient assistance programs for consumers whose income falls below a certain level. Check out different assistant plans here.

Generics, which are also touted in the reform, have been seen by experts for some time as a salve for lowering drug costs.

Consumer’s Union publishes Consumer Reports Best Buy Drugs, which has been systematically evaluating more than 200 drugs for comparative effectiveness for dozens of common conditions for nearly five years.

The evolution of pharmacy benefit management (PBM) companies is also a boon for consumers. PBMs negotiate drug costs with manufacturers, developing formularies (lists of approved drugs).

As importantly, said Dana Felthouse, president of the Pharmacy Benefit Management Institute, PBMs provide patient education on disease management online and through registered pharmacists, who are trained in medication therapy management.

What You Can do to Lower Drug Costs

Comparison Shop

Check out online pharmacies, mail order pharmacies and pharmacies in your town. Drug prices vary widely from store to store and shopping on the Internet and through mail order can be especially convenient and money saving.  

Understand Your Drug Plan 

Check with your employer’s health benefits office, your health plan provider or your PBM and ask them how to get your medicines at the lowest price.

Determine which drugs are covered under your formulary and which tier or category your medicines fall to determine your out of-pocket co-pay.

Work with your physician 

Discuss the effectiveness of varying drugs for your medical condition during your office visit. Don’t try to engineer a switch at fifteen minutes before your pharmacy closes.

Check out Drug Comparison Web sites

Sites like or will help you find the best prices for your meds. Your state may also have a comparison site, so be sure to search around.