GoodRx

How Does GoodRx Work – Plus When You Should Use It

GoodRx helps you compare drug prices and find coupons at over 70,000 retail pharmacies. But how does GoodRx work and when should you use it?

In this article, we’ll take a look at the popular prescription discount card, how it works, and when you should use it. Plus we’ll cover some frequently asked questions like how the company makes money and whether or not it can be used with health insurance.

Let’s start!

Overview of Prescription Drug Prices

Prescription Drug Prices

Before we talk about GoodRx, it helps to have a basic understanding of prescription drug prices and how they work.

Now to be clear, prescription drug pricing in America is incredibly complex. It would take us pages to cover all the intricacies so we are just going to cover some basics here.

Mainly:

  • Over 90% of prescriptions are paid through insurance
  • PBMs and insurance set the price for these (not the pharmacy)
  • This price you pay for a prescription usually comes as a copay

Copays are typically much lower than the actual cost of your medication. Generally, prescription insurance will pay for the rest. Here’s a simple example.

You go into the pharmacy to pick up a prescription medication. You provide your health insurance information and the pharmacy submits a claim. Your health insurance approves it and tells the pharmacy what copay they need to charge.

For example, on a medication that costs $200, the copay might be $20. The pharmacy is then reimbursed by your insurance company for the remaining $180.

This is an extremely simplified example but the point is you do not usually pay the actual cost of the drug. You only pay the copay set by your insurance company.

One way to reduce your prescription costs is by exploring generic alternatives, which are often much cheaper but equally effective.

How Does It Work?

What Is GoodRx

GoodRx is a company that helps consumers compare prices and find discounts on prescription drugs being paid for without insurance. It was founded in Santa Monica, CA in 2011 by former Facebook executives Doug Hirsch and Scott Marlette. As of 2021, it is accepted at over 70,000 retail pharmacies and has helped patients save over $30B.

One important thing to understand is the prices you are comparing when using their website are only cash prices. In other words, you can only compare the price you would pay if you decided to not use insurance. According to the Kaiser Family Foundation Research, this is how less than 10% of all medications are paid for.

To use the service, just visit the website and search for your medication.

You will then be shown a list of prices at participating pharmacies near your location. By default, the prices will be sorted by “Popularity” so make sure you select the lowest price option to get the best price.

Once you have a discount you like, print off your coupon or save it to the app so you can present it when you go to the pharmacy.

Can You Use GoodRx with Insurance?

Can You Use GoodRx with Insurance?

No, you cannot use GoodRx with insurance. While it may be used in place of insurance, you cannot use both at the same time. If you are considering using GoodRx, check with your health insurance provider to see if they offer a better generic or brand-name medication price. Generally, your health insurance copay will be significantly less than the cash price.

In addition, there may be times when you can save money on your overall annual health care costs by using your insurance even if the price listed on their website is lower. This is because using insurance will count toward your deductible and reduce your overall yearly healthcare costs.

Ultimately, consider all your healthcare costs throughout the year and make a decision that fits your individual needs.

How Does GoodRx Make Money?

GoodRx makes money primarily from referral fees paid by PBMs when a prescription is filled with a GoodRx code.

PBMs are pharmacy benefits managers who work with health insurance companies to perform a number of 3rd party administrative duties related to prescription drugs. They have been the subject of much debate related to their impact on increasing prescription prices and overall costs.

Here’s a basic overview of how GoodRx makes money from PBM referral fees:

  • Customer presents their coupon
  • Pharmacies input the BIN and PCN number (similar to insurance) for the PBM
  • PBM provides the price and charges the pharmacy a fee based on the price
how does goodrx work coupon example
Example GoodRx Coupon

Based on that fee, the PBM then splits a percentage with GoodRx as payment for their “referral”.

The Gold Membership Program

gold goodrx

GoodRx Gold is a monthly membership program that claims to provide even greater discounts on prescription drugs and health services. The program boasts 1,000 prescriptions for under $10 at pharmacies across the country.

Similar to their normal coupons, all you need to do is show your card or mobile app when you fill a prescription at any participating pharmacy. This program cannot be combined with your regular insurance. If you ever need to transfer your prescription to another pharmacy, simply inform the new pharmacy and they will handle the transfer process seamlessly.

How Much Is It?

GoodRx Gold costs $9.99 for an individual membership and $19.99 for a family plan. For a family plan, you can add up to 5 family members including pets. The subscription also allows you to try for up to 30 days free.

According to the company, an average family can save up to $4,052 per year with membership. When it comes to individual plans, the claim is that $2,862/yr can be saved.

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