Editor’s Note: This article is part of MOAA’s 2023-24 TRICARE Guide, brought to you by MOAA Insurance Plans, administered by Association Member Benefits Advisors (AMBA). A version of the guide appeared in the November 2023 issue of Military Officer magazine.

They’ve been labeled pharmacy industry “disruptors” — online, direct-to-consumer portals allowing patients to fill some prescriptions for pennies on the dollar compared with traditional retail prices.

Backed by major retailers, and even a Shark Tank star, they’ve so far focused on generic medications. For the uninsured and those with high-deductible pharmacy coverage, the savings could be life-changing.

But what do these disruptors mean for TRICARE beneficiaries, especially as they expand their offerings?

Because TRICARE beneficiaries already have relatively low out-of-pocket costs for generic drugs — which made up 84% of all TRICARE private-sector prescriptions in FY 2021 — pharmacy disruptors aren’t likely to provide significant savings to military families. MOAA’s examination of 10 top-selling generic drugs shows most pricing from pharmacy disruptors is in line with TRICARE’s out-of-pocket costs when you consider dispensing and shipping fees.

New visibility on generic drug pricing, from Mark Cuban Cost Plus Drug Company and other emerging providers, demands a reexamination of generic copays across commercial health plans, including TRICARE.

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A 2018 study by University of Southern California’s Schaeffer Center for Health Policy and Economics found commercially insured patient copays for generics were higher than the cost of the medication more than a quarter of the time. This is sometimes true for TRICARE as well.

TRICARE: Greater Drug Coverage

While pharmacy disruptor programs offer a small fraction of available medications, the TRICARE pharmacy benefit covers nearly every one of the approximately 19,000 prescription drugs approved by the Food and Drug Administration. TRICARE copays, set by Congress, range from $12 to $68 and apply to all home delivery orders.

Beneficiaries who fill prescriptions at retail are charged the lesser of the TRICARE copay or the actual cost of the drug Express Scripts has negotiated on behalf of DoD. For generics, beneficiaries often pay less than the TRICARE copay at retail. This price generally falls in line with disruptor offerings, and it won’t include shipping fees that might vary based on location or desired delivery time.

And while generics account for the bulk of TRICARE’s prescription volume, TRICARE pharmacy’s highest costs come from brand-name and “specialty” drugs — uncommon medications that might require training to administer, make up only 1% of TRICARE prescriptions and nearly half of the program’s spending.

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Specialty drugs include top-selling medications such as Humira (for autoimmune disorders, including severe cases of rheumatoid arthritis, Crohn’s disease, and ulcerative colitis); Imbruvica (to treat leukemia); and Eliquis (to prevent blood clots and stroke). These drugs are costly (Humira is listed at $7,061 for a 28-day supply on Amazon Pharmacy) but provide distinct benefits for patients with serious health conditions.

The maximum TRICARE copay for specialty medications is $68, but you might be required to obtain specialty drugs via mail order. It’s unclear whether pharmacy industry disruptors can bring down the cost of brand-name and specialty medications, but current prices underscore the importance of TRICARE coverage when it comes to protecting military families from unexpected health care bills.

Patients’ Responsibility

TRICARE beneficiaries might wonder if filling generic prescriptions using these disruptors would provide a financial benefit. Their prices and costs, for the most part, are clearly visible via their websites; compare with TRICARE costs with this online tool, and be sure to match the prescription’s strength and quantity.

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If you make the move away from TRICARE pharmacy coverage, take note:

• Express Scripts, TRICARE’s pharmacy provider, will not have visibility for those medications and cannot alert you to possible drug interactions.
• It is essential you keep track of all your medications and give this information to your medical providers.
• Any out-of-pocket costs incurred for prescription drugs purchased outside the TRICARE benefit will not accrue to your catastrophic cap, which is $3,000 annually for TRICARE For Life beneficiaries.

MOAA’s Role

MOAA will continue to monitor the competitive landscape as companies such as Amazon and Cost Plus Drugs expand their offerings. If they are successful in moving beyond generics, it will most certainly impact commercial and employer-sponsored health plan prescription drug coverage, including TRICARE.

MOAA will continue to work on your behalf to ensure TRICARE provides the comprehensive coverage at low out-of-pocket costs that servicemembers and retirees have earned.

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Drug Disruptor: Walmart

Who: Walmart $4 generics

What: Walmart was one of the first to drop prices on generic drugs, introducing the $4 generics program in 2006. Shoppers can get up to a 30-day supply of select generic medications in common dosages for $4 (or a 90-day supply for $10). Higher dosages cost more.

Which drugs: Walmart’s $4 generics list includes about 100 of the 19,000 prescription medications approved by the FDA, including some of the most frequently prescribed generic drugs.

Fine print: The program requires no membership and has no additional fees for the covered drugs and dosages. 

Drug Disruptor: Cost Plus

Who: Mark Cuban Cost Plus Drug Company

What: Launched in January 2022, this direct-to-consumer prescription drug offering prices every product the same way, adding a 15% markup to the per-unit cost they’ve negotiated directly with manufacturers.

Which drugs: More than 1,000 of the most highly utilized and/or most high-cost generic medications are offered to date, with company officials saying they’ll work to increase that number.

Fine print: Each order includes a pharmacy dispensing fee of $3 per drug per order. Consumers maximize savings by ordering the largest quantity possible each time they check out and pay a separate packaging and shipping charge (typically $5 for standard shipping). It accepts only a few select insurance plans and is not in the TRICARE pharmacy network.

Drug Disruptor: Amazon

Who: Amazon Pharmacy and Amazon RxPass

What: Introduced in November 2020 as a home delivery option targeted at maintenance medication users, Amazon Pharmacy allows customers to purchase prescription medications through the Amazon online store with or without using insurance. The Amazon Prime prescription savings benefit, also introduced in November 2020, allows Prime subscribers who aren’t using insurance to compare discounted prices across various retail pharmacies — including Amazon Pharmacy — and fill prescriptions at retail using a digital coupon. This benefit saves members up to 80% off generic and 40% off brand-name medications.

What else: Amazon introduced RxPass — a subscription service that allows Prime members to get eligible generic medications for a flat fee of $5 per month, including free Prime delivery — in January 2023. Patients do not use health insurance with RxPass. It’s a flat $5 monthly add-on to Prime membership, which is $139 annually.

Which drugs: Amazon Pharmacy carries a wide range of prescriptions, though savings vary depending on brand. Shoppers can search their medication at Amazon.com for details. As of this writing, there are about 65 medications included as part of RxPass.

Fine print: The Amazon Prime subscription savings benefit is not insurance and cannot be combined with insurance, including TRICARE.