The Cheapest States for Prescription Drugs

Published on September 15th, 2021

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Prescription drug prices remain a crippling concern for older Americans. According to our recent survey, nearly three out of 20 on Medicare faced trouble settling a prescription drug bill in the last year.

The U.S. has the highest total drug expenditure and costliest pharmaceutical spending per capita among developed countries, which experts attribute to our steep drug prices. 

Fast Facts

Almost two in three Americans (64%), age 65+ tried to save on prescription drugs in the last year by asking for generics (23%), obtaining larger supplies to reduce copays (19%) and other methods, according to MedicareGuide research

Average Spent on Prescription Drugs, 65+ Americans: $7,554

2020 Total U.S. Prescription Drug Expenditure: $407 billion

Medicare Part D Prescription Drug Enrollment: 48 million (77% of Medicare beneficiaries)

The Biden administration recently announced its support for Medicare to directly negotiate drug prices with pharmaceutical manufacturers and pass those lower rates along to consumers. 

But the administration also delayed enforcement of a new insurer price transparency rule initially set to take effect on January 1, 2022. The rule will require insurers to publish prescription prices. But the Biden team won’t crack down until next July now. 

As Medicare beneficiaries await new moves to ease prices and boost transparency, many elderly Americans face the reality of not being able to afford their medications. 

Which states currently offer the cheapest prescription drugs for the senior population?

MedicareGuide compared all 50 states and Washington, D.C., to determine the cheapest states for Americans over 65. We compared and scored metrics such as out-of-pocket costs for Medicare Part D plans and Medicare Part B drug prices to see how each state fared.

Read below for our findings, methodology, and a deep dive into some of the factors that make U.S. prescription drugs the world’s costliest.

StateCostAccessQualityTotal Score
Maine24.3312.4113.0749.81
Missouri23.1518.4615.0356.63
Kentucky22.8923.3610.8757.11
Vermont22.4912.7423.8459.08
New Hampshire22.2313.2322.4657.93
Louisiana21.7119.7616.9858.46
Indiana21.0615.0319.5255.61
Montana20.9327.1122.7070.74
Mississippi20.7913.3913.6547.83
Michigan20.4018.9516.3355.68
North Carolina20.4016.5015.7752.67
Idaho20.2719.1115.1954.57
Arkansas19.8817.3116.4253.61
Oregon19.887.5116.6644.05
Wisconsin19.7515.039.9644.74
Massachusetts19.7518.1320.2558.13
Rhode Island19.6211.115.0735.79
South Dakota19.4929.2422.1470.86
Hawaii19.495.238.8233.53
Ohio18.4414.7010.6243.76
Washington18.316.5312.4137.26
Kansas17.7925.9721.9765.73
Oklahoma17.5316.176.7040.40
Alaska17.2614.0517.6448.95
West Virginia17.2622.3812.6652.30
Arizona17.1314.5416.3348.00
North Dakota17.0031.2025.5673.76
South Carolina16.6112.9019.3648.87
New Mexico16.619.1512.4138.17
Iowa16.2222.8721.0760.15
Delaware16.2212.7420.9949.95
Wyoming16.0924.3417.9758.39
New York16.0910.457.1933.73
Connecticut15.9613.2320.0949.28
Nevada15.5610.1322.5448.23
California15.4313.5621.4950.48
Georgia15.4315.527.7638.71
Virginia14.2620.2512.3446.85
Minnesota13.9923.6811.6849.36
New Jersey13.0822.0516.5051.63
Florida12.957.6815.6036.22
Pennsylvania12.5622.8715.8551.27
Colorado12.4216.6619.2048.28
Maryland12.1612.9027.4452.51
Texas11.9018.2913.6443.84
District of Columbia11.7717.805.7235.29
Nebraska11.6430.0517.9759.66
Illinois10.9915.3515.3541.69
Alabama10.8617.642.2930.79
Utah10.0715.5221.9847.56
Tennessee9.0221.5614.2944.88

The Prescription Drug Pricing Riddle

To better understand drug costs, MedicareGuide.com looked more closely at prices of popular medications across the 50 states.

Examining Medicare Part D data, we saw that some drugs were reimbursed at similar rates nationwide. 

But the prices of other pharmaceuticals varied widely.

The below chart visualizes the cost per Medicare Part D claim of atorvastatin, a widely prescribed cholesterol drug sold under the brand name Lipitor. 

The cost per claim ranges from a low of $11.72 in Mississippi to a high of $25.54 in Maine, a difference of nearly 220%. 

Industry observers say it’s difficult to determine which of many possible factors underlie such price differentials. 

A pharmaceutical expert with HealthCare.com’s parent company MedicareGuide.com, Scott Lake, says one factor is that Medicare Part D prescription drug plans are grouped by ZIP codes and counties with varying costs of living.

“Another factor,” Lake notes, is that, “Plans are designed to appeal to different demographics. They target health and sick groups with varying lists of covered drugs, premiums and copays.”

Lastly, state laws governing pharmaceuticals, differing costs of distribution, and even the cost of real estate can shape drug prices.

State Differences Can Obscure Even Larger Disparities

While drug prices generally correlate to a state’s cost of living, they vary wildly from city to city, even within the same state.

For this reason, the above state averages mask bigger differences between the cost of medications in the same market and time frame. 

MedicareGuide.com was able to obtain a snapshot of recent drug pricing data. 

The next chart shows two different insurance payments for a single fill of lidocaine 5%, a widely prescribed topical analgesic. 

The cost ranges from $31.43 to $1,524.72 – almost a 5,000% difference.

In addition to factors already cited, experts say such extreme variances can also be driven by three variables: 

  • Rebates pharmacies and plans negotiate with manufacturers
  • Demographics
  • Complexities of the financial models underlying health policy 

Help Is Available

Some states offer help for older residents who have trouble paying for their prescriptions. Each program, called a State Pharmaceutical Assistance Program (SPAP), operates differently. Some states help people with specific illnesses such as HIV/AIDS or  EndStage Renal Disease (ESRD) pay for their prescription drugs. 

States that offer SPAPs often work with Medicare’s drug benefit (Part D). For example, if a drug is covered by both SPAP and Part D, what you pay plus what the SPAP pays for the drug will count towards your Medicare out-of-pocket maximum before drug costs decrease. Check with your state’s program to see how.

Though limited in scope, SPAP plans are worth investigating if you need help. Notes HealthCare.com Medicare expert Christopher de la Rambelje: “There are quite a few people who qualify for these plans, but are unaware of the savings they can offer on prescription drug coverage.”

StatePlanPhoneMax Income IndivMax Income CoupleLink
ConnecticutConnPACE800-423-5026$26,400$35,600https://portal.ct.gov/AgingAndDisability
MontanaBig Sky RX Program866-361-1233$25,760$34,840https://dphhs.mt.gov/MontanaHealthcarePrograms/BigSky.aspx
New JerseySenior Gold RX Discount/PAAD800-792-9745$38,769$45,270https://www.state.nj.us/humanservices/doas/services/seniorgold/
NevadaSenior RX775-687-0539$30,556$40,732https://adsd.nv.gov/Programs/Seniors/SeniorRx/SrRxProg/
New YorkEPIC800-332-3742$75,000$100,000https://www.health.ny.gov/health_care/epic/
PennsylvaniaPACE/PACENET800-922-9384$27,500$35,500https://www.aging.pa.gov/aging-services/prescriptions/Pages/default.aspx
Rhode IslandRIPAE401-462-3000$68,582$78,232https://oha.ri.gov/what-we-do/access/health-insurance-coaching/drug-cost-assistance
VermontHealthy Vermonters/Vpharm800-250-8427$22,164$29,820https://www.greenmountaincare.org/prescription
WisconsinSeniorCare800-657-2038$30,913 or greater$41,809 or greaterhttps://www.dhs.wisconsin.gov/seniorcare/index.htm

Methodology

To determine the cheapest states for prescription drugs, MedicareGuide compared the 50 states and District of Columbia across five key cost metrics.

We also evaluated states’ access to drugs and quality of insurance coverage using eight relevant metrics, which are detailed below. 

Lastly, we determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank our sample.

Cost – Total Points: 33.33

  • Average Annual Part D Drug Deductible
    Best: Missouri
    Worst: Illinois
  • Average Monthly Premium Part D
    Best: Mississippi
    Worst: Florida
  • Percent of Taxable Earnings Going to Medicare Part D Drug Coverage
    Best: West Virginia
    Worst: North Dakota
  • Part B Drugs Per Capita Actual Costs
    Best: Vermont
    Worst: Florida
  • Annual Prescription Drug Price Per Capita
    Best: Hawaii
    Worst: Tennessee

Access – Total Points: 33.33

  • Total Number of Available Part D Plans Per State
    Best: California
    Worst: Alaska
  • PDP Enrollment by State
    Best: North Dakota
    Worst: Hawaii
  • Pharmacists Per Capita
    Best: Washington, D.C.
    Worst: Vermont
  • Pharmacies Per 10k Residents
    Best: North Dakota
    Worst: Oklahoma

Quality – Total Points: 33.33

  • Percent change in PDP enrollment from 2020 to 2021
    Best: Alaska
    Worst: Alabama
  • Average PDP penetration
    Best: North Dakota
    Worst: Hawaii
  • Average Part D Star Ratings
    Tied for Best: Montana, South Carolina, Michigan, Indiana, Wyoming, Missouri, North Carolina
    Tied for Worst: Virginia, Oklahoma

Sources: Data used to create this ranking were collected from the Center for Medicare & Medicaid Services (CMS), Kaiser Family Foundation, USARx, and MedicareGuide research. 



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