You may be able to pay less for prescription drugs by skipping insurance and paying cash. Using discounts available from websites like America’s Pharmacy, Blink Health, GoodRX, Optum Perks, SingleCare, RXSaver (by RetailMeNot), and WellRX may make your costs lower than your insurance copays. I’ve done this in the past and in one year saved nearly $1,000.

For example, a few years ago I used a coupon available from GoodRX to lower the out-of-pocket price from $122 to $12 for a 90-day supply of a pill I was taking. I needed to transfer the prescription to another pharmacy near my house that accepted the coupon, but that minor inconvenience saved me $440 that year. My wife was able to use the coupon at the same drugstore and saved $528 that year.

What’s going on here? Why am I paying for health insurance and getting significantly lower prices for medicines by not using it?

“Unfortunately, the magical world of prescription drug prices is very much a black box, so it's very difficult to say exactly what's happening,” said Leigh Purvis, director of healthcare costs and access at AARP. “A lot of different things are involved in how insurers set their cost-sharing, and we’re finding that a lot of times you may have a higher copay for your share of the price of that drug than you would if you’d shopped independently.”

When it comes to health insurance, prescription drug pricing is a moving target. Insurance companies typically change their formulary—which drugs are covered and at what copay levels—each autumn just before open enrollment. But it can happen at any time with little notice.

A drug you take on a regular basis can be moved to a different tier that has a higher copay or it can be dropped altogether by your insurance company. You also pay more out of pocket for your meds until you meet any annual deductible.

Your insurance company hires a third-party administrator called a pharmacy benefit manager (PBM) to set its formulary. After negotiating prices with the drug companies, the PBM decides which drugs will cost more, which will cost less, and which won’t be covered at all.

In many cases, pharmaceutical companies pay the PBM to favor some of their drugs in that formulary by putting them in a lower-priced tier (smaller copay for the consumer) to boost sales, according to Lisa Gill, investigative reporter for health and medicine at Consumer Reports.

“It’s legal, even though consumers will not see the benefit of these so-called ‘rebate’ payments,” Gill told Checkbook. “As this money moves between drug companies and pharmacy benefit managers, what bubbles forth is a formulary that can be very irrational to the consumer. It’s not transparent, and you only feel the pain of this price system as you go to fill the prescription.”

That explains why you might have a $20 copay on a cheap generic drug that would cost you $10 if you paid without using insurance.

“And that scenario can happen because there’s a competing drug—a branded version or extended-release version––that the PBM would rather you take, as opposed to the cheap generic,” Gill said. “Intuitively, that doesn’t make sense to you, but it makes economic sense to the PBM that’s getting rebate money to favor that higher-priced drug.”

How Online Discount Coupons Work

It’s easy to compare discounts offered by these websites for prescriptions filled by pharmacies in your area. Just visit a discount program’s website, enter your Zip code, the name of the drug, the dosage, and the quantity. You’ll get a list of nearby pharmacies that accept that online discount coupon and the prices for each store. You may also see prices for mail order and home delivery services.

For example, I searched SingleCare.com for a 30-day supply of Atorvastatin Calcium 40mg tablets, (the generic version of the widely prescribed cholesterol-lowering drug Lipitor) and found the following coupon prices for stores in the Chicago area:

• $8.33 at Mariano’s
• $8.93 at Meijer
• $9.97 at Walmart
• $13.68 at Capsule.com (mail order)
• $14.64 at Jewel-Osco
• $16.88 at Walgreens
• $24.87 at CVS

To get the discount, just print the coupon, or text or email it to yourself and take it to the store. You don’t need to provide any personal information. And there’s generally no membership fee. The coupon companies are paid commissions from the pharmacies that get their referrals.

With some programs, you simply present your membership card, which requires registering first.

Some sites, including GoodRX and SingleCare now offer a one-time “member bonus” of $3.00 off the listed coupon price at some stores for those who are willing to sign up and provide their full name, email address, date of birth, and Zip code. By doing this, the site will be able to track the coupons you use (i.e., the drugs you buy) and your browsing history, allowing it to market this information.

Note: These coupons are also a money-saving option for those with no health insurance. Many also offer discount coupons for over-the-counter (non-prescription) medications.

Consider online coupons for your pet's prescriptions if there’s a human equivalent and dosage available. Talk to your vet.

Check for Savings

Consumer Reports recommends checking at least one coupon site to see if it can save you money.

“You might very well be surprised,” said Consumer Reports’ Gill. “These companies offer hundreds, if not thousands of coupons and discounts, and particularly on generic drugs. You'll see the greatest savings on generic vs. brand-name drugs.”

No matter where you shop, Consumer Reports recommends asking your pharmacist: “What is the lowest possible price you can give me and is there a cheaper price if I don’t use my insurance?”

“That question was unthinkable 10 years ago,” Gill said, “but it’s become important now that insurance companies are covering less and less.”

What’s more, Gill says be sure to ask independent, mom-and-pop pharmacies if they will negotiate lower prices with you, since they have greater leeway over what they can charge.

Check Privacy Policies

Before you use one of these apps or websites, check its privacy policy to make sure you're comfortable with the type of data it collects and how it's used. The amount of information collected (and sold to other companies) varies from site to site. Although when using these types of websites your private health data is NOT protected by HIPAA and other privacy laws, the policies for GoodRX and a few of the other sites we checked state they won't sell or share info about the prescriptions you shop for when using their websites. But most of these services will trade or sell your name, email address, age, location, and other information to other companies.

Some of the discount services don't require that you provide any personal information. For example, at GoodRX you can print coupons or use its app without supplying any info about yourself. On the other hand, WellRX requires you to provide your full name, email address, date of birth, and Zip code to use its savings card.

Consider This

If you use a coupon from these websites, you won’t be able to use your health insurance (whether private or Medicare), so the purchase does not count toward your annual deductible.

But if you don’t anticipate meeting your deductible for the year, coupons can be a good choice. If you do expect to meet it, then consider using insurance and paying the higher price.

Safety is something else to consider. Pharmacies have safeguards in place to help prevent harmful drug interactions. If you need to shop at more than one pharmacy to use the coupons, you’re going around those safeguards, so it’s important to make sure your doctor and your primary pharmacy have a list of all the drugs you take.

Other Ways to Save

Using coupons isn’t the only way to save. Other options include:

Mail order: To encourage online shopping, insurance companies typically have better prices for ordering your drugs online.

Buy a bigger amount: If you’ll be on a drug for more than three months, ask your doctor if you can get a prescription for a 90-day supply. Chances are you’ll pay significant less than with a 30-day refill.

Shop around: Don’t assume every pharmacy has the same price for the same drugs. It can vary greatly. Consumer Reports found “remarkable” price differences when they shopped a market basket of five popular generic drugs a few years ago. Total price for those five drugs ranged from $66 to $928 for a one-month supply.

Ask for free samples: If you’re prescribed a new drug during an in-person visit, and money is tight, ask the doctor if there are any free samples available.

Some pharmacies offer free drugs: Some supermarket chains offer certain medications for free.

Shop warehouse stores: You can find great prices at Costco and Sam’s Club—and you don’t need to be a member to shop at the pharmacy.

Look at patient assistance programs: Some pharmaceutical companies have programs to help lower prescription drug prices. Check the industry’s PhRMA’s Medicine Assistance Tool, or visit the Medicare website if you’re enrolled in Medicare prescription drug coverage (Part D). The nonprofit NeedyMeds.org can help you find discount programs offered by drug manufacturers.

Visit a charitable clinic: There are now more than 1,200 non-profit clinics across the U.S. that provide low-cost of free medical care, including drugs, for those in need. (You may have to provide details about income or insurance status.) Check the website for the National Association of Free & Charitable Clinics to find a clinic near you.