New ways to save on drugs

(Money Magazine) -- We've reached a dubious health milestone: More than half of insured Americans are now taking at least one "maintenance" drug for a chronic condition, according to a recent health industry report.

Meanwhile, the price of brand-name medications rose 2½ times faster than the rate of inflation last year. Here's the news you need to know to avoid the worst of the pain - no clandestine trips to Canada required.

Discounters have become the best inflation hedge

Wal-Mart (WMT, Fortune 500), which in 2006 began selling 30-day supplies of generics for $4 a pop, just rolled out another plan perfect for people who take meds daily and have a high co-pay: a 90-day supply of any of about 350 generics for just $10 (or your co-pay, whichever is less).

Competitors like Target (TGT, Fortune 500) and Kroger quickly matched the price cuts. Some discounters might offer drugs that others don't, so visit their websites to see if your medicine is on their lists.

More employers are insisting you use mail order

Some employers now require workers who fill the same scrip more than three months in a row (basically anyone on a daily regimen) to order 90-day supplies from an approved mail-order company - or receive a lower reimbursement than the pharmacy rate they're used to. At Time Inc. (Money's parent), for example, your pharmacy co-pay rises by 25% after three months. So before you head to Wal-Mart, do the math.

Insurers are raising co-pays on brand-name drugs

Generics have always been cheaper than brand names, but it's gotten even costlier to insist on, say, Prozac rather than fluoxetine. According to the Kaiser Family Foundation, the average co-pay for a 30-day "nonpreferred" brand is now $43, up from $28 in 2001. The average generic co-pay is just $11, so ask your doctor to prescribe the generic equivalent if one exists (it does more than 75% of the time).