What you need to know about the forces reshaping our industry.


July 16, 2018

Where Rx drugs cost the most (and the least)

Daily Briefing

    The prices consumers pay for prescription generic drugs vary widely based on where they live, according to a recent analysis by GoodRx.

    Infographic: How pharmacy can help reduce employee benefit costs

    Analysis details

    For the analysis, researchers from GoodRx examined data on the cash prices of drugs at U.S. pharmacies to determine differences in what consumers pay for drugs around the United States.

    While most consumers have insurance and discounts are available in some cases, an increasing number of consumers are paying for a higher share of their prescription drug costs, according to the Times.

    The data—which came from insurers, pharmacies, and other sources—included the cash prices of the 500 most commonly prescribed medications between April 2017 and April 2018 in 30 of the most populous U.S. cities.


    Cash prices relative to US average

    GoodRx found significant differences in the cash prices consumers paid across the 30 most populous U.S. cities. For example, the analysis showed cash prices ranged from as much as about 20% more than the national average in New York to about 22% less than the national average in Columbus, Ohio.   

    According to the analysis, the five cities with the highest cash prices for drugs were:

    • New York, with cash prices 20.1% higher than the national average;
    • San Francisco, with cash prices 12.6% higher than the national average;
    • Los Angeles, with cash prices 9.8% higher than the national average;
    • Philadelphia, with cash prices 7.9% higher than the national average; and
    • San Diego, with cash prices 6.4% higher than the national average.

    By contrast, the five cities with the lowest cash prices for drugs were:

    • Columbus, Ohio, with cash prices 21.70% below the national average;
    • Atlanta, with cash prices 18.6% below the national average;
    • Houston, with cash prices 17.4% below the national average;
    • Dallas, with cash prices 16.9% below the national average; and
    • Denver, with cash prices 16.3% below the national average.

    According to the researchers, the "data highlight[t] the nonsensical and variable nature of drug pricing." For instance, the researchers noted Cleveland and Columbus are "a mere 150 miles apart, but their prices for prescription drugs differ significantly." For instance, a generic version of the antidepressant Paxil costs about $46.94 in Cleveland but $20.87 in Columbus.

    Factors behind the differences

    The researchers said differences in the cost of living across the 30 cities could account for some of the disparity in cash prices for drugs, particularly in cities such as New York and San Francisco, but said that cost of living could not explain all of the variation. For example, the researchers noted that the cost of living in Washington, D.C., is relatively high, but cash prices for drugs in Washington, D.C., are 9.6% lower than the national average.

    According to the researchers, the availability of big box stores might also contribute to price variation as those stores typically offer brand-name and generic drugs at low prices. For example, the researchers said such stores sell generic drugs for $4 for a 30-day supply and $9 for a 90-day supply. 

    In addition, the researchers noted retail markups might play a role in price variation. "Some pharmacies will claim a higher margin to support their business, and those pharmacies may be distributed unevenly across states," the researchers said.

    Meanwhile, Thomas Goetz, the chief of research at GoodRx, said most of the variation in drug prices can be attributed to the "drug prices make no sense" theory. He said the findings provide "one more indication of how nonsensical drug prices can be, and how important it is to be vigilant about what you are being asked to pay" (Thomas, New York Times, 7/8; Marsh, GoodRx, 7/6).

    Learn more: How you can save money on your employees' drug cost

    To learn more about how you can save money on your employees' drug cost, view our infographic on how pharmacy can help reduce employee benefit costs.

    Download Now

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.