What Determines How Much Your Patient Pays for Their Medication in the United States?

Am J Ophthalmol. 2016 Jul:167:48-51. doi: 10.1016/j.ajo.2016.04.010. Epub 2016 Apr 27.


Purpose: To evaluate the cost paid by patients in the United States for their branded, prescription medication, and the factors that determine the cost.

Design: Evaluation of publicly available information on the U.S. pharmaceutical distribution system.

Methods: Review of public information and interpretation based on the author's experience.

Results: The price paid for branded, prescription medication by an insured patient is set by the patient's insurance company-not the manufacturer, distributor, or pharmacy-and is typically a co-pay, which is a fraction of the wholesale acquisition cost (WAC). On the other hand, for an uninsured patient, the patient cost is higher than the WAC and may vary dramatically, depending on the pharmacy. Furthermore, lowering of the WAC by the manufacturer (eg, a new product in the same class) may not lower the patient payment, as that cost is set by the insurer and may depend on rebates from the manufacturer to the distributor and to the insurer. The proportion of patients in the United States covered by insurance is growing.

Conclusion: In the same way that the mean (or median) may not accurately describe a bimodal population, the WAC does not accurately describe the cost of branded, prescription medication to patients. To reduce medication costs to patients, recommendations are as follows: (1) selection of insurance plans whose formularies cover their medications in a low tier (eg, "Preferred"), (2) for patients without insurance, price compare at multiple pharmacies; (3) use manufacturer-supplied coupons to reduce out-of-pocket costs, and (4) consider therapeutics-optimal use of medications often executable with little or no cost to the patient.

MeSH terms

  • Cost Sharing
  • Drug Costs*
  • Drug Prescriptions / economics*
  • Drug Utilization / economics
  • Health Services Accessibility
  • Humans
  • Insurance, Pharmaceutical Services / economics*
  • Managed Care Programs / economics*
  • Prescription Drugs / economics*
  • Prescription Fees*
  • United States


  • Prescription Drugs