Prescription Drug Coupons: How They Work and the Fine Print

Free coupons from GoodRx, SingleCare, and manufacturers can cut your costs dramatically. But there are tradeoffs most people don't know about.

Free prescription coupons from GoodRx, SingleCare, RxSaver, and similar services have saved millions of Americans money on medications. But what are they actually doing behind the scenes? How do they make money if they're free? And are there tradeoffs you should know about?

How Discount Cards Actually Work

Prescription discount cards are not insurance. They're access points to pre-negotiated pricing between the discount card company and a pharmacy benefit manager (PBM). When you show a GoodRx coupon at the pharmacy, the pharmacist runs your prescription through GoodRx's contracted PBM instead of your insurance. The PBM has a negotiated rate with that pharmacy, and you pay that rate.

The discount card company earns a fee from the PBM on each transaction. The PBM earns a spread between what the pharmacy charges and what it pays out. The pharmacy accepts a lower price because discount card transactions bring in customers who might otherwise go elsewhere. Everyone gets paid — and you still get a lower price than the pharmacy's cash rate.

When Coupons Beat Insurance

For many generic drugs, the discount card price is lower than your insurance copay — especially if you have a high-deductible plan where you're paying full price until you meet your deductible. If your insurance copay for a generic is $15 and the GoodRx price is $6, the coupon saves you $9. The pharmacist can check both and use whichever is lower.

Manufacturer Coupons Are Different

Manufacturer coupons (copay cards) work differently from discount cards. These come directly from drug manufacturers, usually for brand-name medications, and they cover part or all of your insurance copay. The manufacturer is essentially paying your copay to keep you on their drug instead of switching to a competitor.

Manufacturer coupons generally cannot be used by Medicare, Medicaid, or other government-insured patients — federal law prohibits it. They also expire and have annual caps on total savings. But for commercially insured patients on expensive brand-name drugs, they can reduce monthly costs from hundreds of dollars to under $10.

The Data Tradeoff

Free discount card services make money by facilitating transactions, and some also monetize user data. GoodRx, for example, has faced regulatory scrutiny over sharing user health information with advertisers. SingleCare's privacy practices are similar. When you use these services, you're sharing your prescription information — drug name, pharmacy, fill date — with the discount card company and its partners.

For most people, the savings outweigh the privacy concern. But it's worth knowing the tradeoff exists. Read the privacy policy if data sharing concerns you.

Getting the Best Coupon Price

Prices vary between coupon services and between pharmacies. Always check at least two discount card services (GoodRx, SingleCare, RxSaver) at your preferred pharmacy before filling. Better yet, use RxGator to compare across multiple sources — including discount cards, pharmacy programs, and direct-to-consumer pharmacies — in one search. And always confirm the price with the pharmacist at the counter before they fill — coupon prices can change.