The rising cost of prescription drugs in America: Can discount cards provide relief

Prescription drug spending in the United States has been on a steady rise for years, with Americans paying some of the highest prices in the world for their medications. Even those with insurance often face high out-of-pocket costs due to rising premiums, copays, and deductibles. With the increasing financial burden on consumers, prescription discount cards have emerged as an alternative to help mitigate costs. These cards, offered by third-party companies, work by negotiating discounts with pharmacies and pharmacy benefit managers (PBMs) to provide lower prices on prescription medications. Unlike insurance, they do not require a monthly premium and can be used by anyone, regardless of coverage status, explains SaveHealth, a prescription discount website. But how effective are these programs, and can they provide meaningful savings in the long run? 

The Growing Burden of Prescription Drug Costs

According to a 2023 report from the Centers for Medicare & Medicaid Services, total healthcare spending in the U.S. reached approximately $4.9 trillion, marking a 7.5% increase from the previous year. Within this, prescription drug expenditures saw the highest growth rate at 11.4%, largely driven by specialty medications and price increases by pharmaceutical companies.

The burden of high drug costs does not only affect the uninsured. Even those with employer-sponsored insurance or Medicare Part D plans often find that their medications remain unaffordable due to factors such as high-deductible health plans and noncovered drugs. A 2022 Kaiser Family Foundation study found that nearly 30% of Americans reported not taking their prescribed medications due to cost concerns.

Why Are Prescription Drug Prices Increasing?

1. Specialty Medications and New Drug Pricing

One of the primary drivers of increasing prescription costs is the growth of specialty medications, which are often used to treat chronic or life-threatening conditions such as cancer, multiple sclerosis, and rheumatoid arthritis. These drugs often cost thousands of dollars per month and now account for nearly 50% of total prescription drug spending in the U.S., up from just 19% in 2004.

Pharmaceutical companies justify these high prices by citing extensive research and development (R&D) expenses. However, critics argue that drug pricing strategies lack transparency, with many companies raising prices on existing medications without any corresponding increase in R&D costs. In early 2025 alone, over 800 prescription medications saw list price increases, with a median hike of 4%, according to a Wall Street Journal report.

2. Pharmacy Benefit Managers and Pricing Markups

PBMs play a significant role in the drug pricing system. Acting as intermediaries between drug manufacturers, insurance companies, and pharmacies, PBMs negotiate rebates and determine which drugs are covered by insurance plans. While they claim to help lower costs through negotiated discounts, critics argue that PBMs often inflate prices by keeping a large portion of these rebates rather than passing savings onto consumers.

Recent lawsuits have revealed that some PBMs have been suppressing reimbursements to independent pharmacies, effectively limiting competition and contributing to higher drug prices. The Federal Trade Commission and lawmakers have increased scrutiny on PBM practices, yet significant reforms have yet to take effect.

3. Lack of Pricing Regulation

Unlike many other countries that regulate drug pricing, the U.S. allows pharmaceutical companies to set their own prices with minimal government oversight. While Medicare can now negotiate some drug prices under the Inflation Reduction Act of 2022, these measures will only impact a limited number of medications and take years to implement fully. As a result, most consumers will continue to see rising costs for the foreseeable future.

The Role of Prescription Discount Cards

As drug prices continue to soar, many consumers are turning to prescription discount cards as a potential solution. These cards provide discounts on prescription medications at participating pharmacies. While they are not a replacement for insurance, they can offer substantial savings, particularly for those without coverage or with high out-of-pocket costs.

How Do Prescription Discount Cards Work?

Discount card providers partner with pharmacies and PBMs to negotiate lower drug prices. When a consumer presents a discount card at a pharmacy, they can often receive a reduced price—sometimes even lower than their insurance copay. Some discount programs also provide comparison tools that allow users to see which pharmacies in their area offer the lowest price for their medications.

The Benefits of Using Discount Cards

Immediate cost savings: Unlike insurance, which often comes with deductibles and copays, discount cards provide an instant reduction in price.

No restrictions on pre-existing conditions: Consumers do not have to worry about eligibility criteria or coverage limitations.

Works with generic medications: Many discount cards offer significant savings on generic drugs, making them more affordable than purchasing through insurance.

Limitations and Considerations

Despite their benefits, prescription discount cards are not a perfect solution. In some cases, they can offer better prices than insurance copays, particularly for generic medications or prescriptions not covered by insurance plans. However, their effectiveness depends on the specific medication, pharmacy, and available discounts at the time of purchase. Some key limitations include:

Not a substitute for insurance: Discount cards do not cover hospital visits, surgeries, or other medical services.

Cannot be used with insurance: Consumers must choose between using their insurance or the discount card for each prescription, which can be confusing.

Privacy concerns: Some discount card companies collect user data for marketing purposes, raising privacy concerns among consumers.

Are Discount Cards a Long-Term Solution?

While discount cards can help alleviate the burden of high drug costs in the short term, they do not address the systemic issues driving up prescription prices in the U.S. Broader policy changes could tackle the root causes of rising drug prices, such as lack of transparency in pricing and the role of intermediaries like PBMs. The reliance on discount cards reflects a broader problem—many Americans are struggling to afford essential medications despite having insurance coverage.

A more sustainable solution requires broader healthcare reforms, such as:

Increased pricing transparency: Requiring pharmaceutical companies and PBMs to disclose pricing structures and rebate distribution could help reduce excessive markups.

Government negotiation of drug prices: Expanding Medicare's ability to negotiate drug prices would help bring costs down for a larger population.

Regulating PBM practices: Implementing policies that prevent PBMs from profiting excessively from rebates and requiring them to pass savings on to consumers could help lower overall drug costs.

Conclusion

The cost of prescription medications in the U.S. continues to rise, placing a significant financial strain on individuals and families. While factors such as specialty drug pricing, PBM influence, and regulatory gaps contribute to high prices, prescription discount cards offer a temporary reprieve for consumers struggling with out-of-pocket expenses.