Doctors prescribe medications every day. But how often do they know what those drugs actually cost?
It’s not a trick question. It’s a systemic problem. A 2016 study of 254 medical students and practicing doctors found that only 5.4% of generic drug prices and 13.7% of brand-name drug prices were estimated within 25% of the actual cost. That means nearly 9 out of 10 times, clinicians guessed wrong - sometimes wildly so. They thought cheap pills were expensive. They thought expensive pills were cheap. And in a healthcare system where patients skip doses because they can’t afford their meds, that disconnect isn’t just inconvenient - it’s dangerous.
Why Does This Gap Even Exist?
Doctors aren’t lazy. They’re overwhelmed. A 2007 review of 29 studies showed that 92% of physicians wanted cost information at the point of care - but couldn’t find it. Back then, checking a drug’s price meant logging into a separate portal, calling the pharmacy, or asking a pharmacist during a rushed visit. That’s 3 to 5 minutes per prescription. Multiply that by 20 prescriptions in a morning clinic, and you’re adding half an hour to an already packed day.
And it’s not just time. The pricing system itself is a maze. The same drug can cost $15 at one pharmacy and $320 at another, depending on the patient’s insurance, deductible, and whether the pharmacy is in-network. Even the same patient might pay different amounts on different days. No wonder clinicians give up and prescribe based on habit, familiarity, or what’s listed first in the electronic health record (EHR).
What Do Studies Actually Show?
The data is consistent across decades. In a landmark 2007 study, physicians overestimated the cost of inexpensive drugs by 31% and underestimated expensive ones by 74%. Why? Because most doctors learn about drugs through medical school textbooks, pharmaceutical reps, and journals - none of which list prices. They’re taught about efficacy, side effects, and mechanisms. Cost? That’s left to the pharmacist, the insurer, or the patient.
Medical students fare even worse. A 2021 study showed that only 44% of students understood that drug prices have almost nothing to do with research and development costs. Most still believe the myth that a $500 pill means $500 went into discovering it. In reality, the average cost to develop a new drug is around $2.6 billion - but that’s spread over decades and thousands of failed candidates. Meanwhile, existing drugs like Humira saw price hikes of 4.7% in 2023 with no new clinical benefits. The price isn’t tied to science. It’s tied to market power.
When EHRs Start Showing Prices - Things Change
The biggest breakthrough in closing this gap came not from education, but from technology. When real-time cost data was integrated into EHRs, things started shifting.
A 2021 JAMA Network Open study found that doctors with access to out-of-pocket cost estimates in their EHRs performed significantly better on cost estimation tasks. Even more telling: one in eight primary care physicians changed a prescription after seeing a cost alert. That number jumped to one in six when the potential savings were over $20.
At UCHealth, a system-wide rollout of cost alerts led to a 12.5% reduction in high-cost prescriptions. That’s not just money saved - it’s patients who actually fill their prescriptions. One resident in r/Residency summed it up: “I prescribed a $400 monthly inhaler. The alert said there was a $15 generic alternative with the same effectiveness. I changed it. The patient cried when she found out she wouldn’t have to choose between her meds and her rent.”
But it’s not perfect. Many systems still show insurer-specific prices, not patient-specific copays. A patient with a high deductible might pay $200 out-of-pocket, but the alert says “$50.” That’s misleading. And some EHRs only show list prices - the inflated “sticker price” that insurers negotiate down, not what the patient actually pays. Clinicians need accurate, personalized data - not generic estimates.
Who’s Getting It Right?
Not every hospital has figured this out. As of Q3 2024, only 37% of U.S. health systems use real-time benefit tools (RTBTs). But the leaders are making a difference.
Mayo Clinic’s Drug Cost Resource Guide, updated quarterly since 2019, has a 4.7/5 rating from over 1,200 physicians. It’s not flashy. It’s simple: a searchable database with actual cash prices, insurance tiers, and generic alternatives. Compare that to the generic Medicare Part D formulary, which scores just 2.8/5 - because it’s outdated, hard to navigate, and doesn’t reflect real-world costs.
And it’s not just about tools. Some institutions are teaching it. A 2021 study found medical students’ drug pricing knowledge improved with each year of training - but only slightly. Only 1 in 5 U.S. medical schools has a formal curriculum on drug pricing. That’s unacceptable. You wouldn’t let a surgeon operate without knowing how to use the scalpel. Why let a doctor prescribe without knowing the price tag?
The Bigger Picture: Why This Matters Beyond the Clinic
Prescription drug spending hit $621 billion in 2022 - nearly 10% of all U.S. healthcare costs. And 28% of adults say they’ve skipped or cut pills because of cost. That’s 1 in 4 people. When doctors don’t know prices, they don’t see the consequences. A patient with diabetes who can’t afford insulin. A senior choosing between heart medication and groceries. A parent who skips their child’s asthma inhaler because the copay is $120.
Cost awareness isn’t about cutting corners. It’s about choosing wisely. The American College of Physicians and the American Medical Association have both declared cost-conscious prescribing a professional responsibility since 2015. And now, federal policy is catching up. The 2022 Inflation Reduction Act lets Medicare negotiate prices for 10 high-cost drugs - a move supported by 80% of Americans, regardless of political affiliation.
What’s more, early data shows that when cost alerts are used effectively, patients save an average of $187 per year on prescriptions. That’s not a drop in the bucket. That’s rent. That’s groceries. That’s a bus pass to get to work.
The Road Ahead: What Needs to Happen
Fixing this isn’t about blaming doctors. It’s about fixing the system.
- Make cost data mandatory in EHRs. It shouldn’t be an optional add-on. It should be as standard as drug interactions and allergies.
- Improve accuracy. Alerts must reflect the patient’s actual out-of-pocket cost - not the list price or insurer’s negotiated rate.
- Teach it in medical school. Pharmacotherapy courses need a module on pricing, value, and affordability - not just mechanisms and side effects.
- Expand RTBTs to safety-net clinics. Preliminary data shows cost alerts reduce disparities: safety-net clinics saw 22% higher prescription modification rates than private practices. That’s equity in action.
- Hold manufacturers accountable. The December 2024 AHA report found five major drugs got price hikes with no clinical justification. Transparency isn’t just for clinicians - it’s for the public.
Some economists argue that doctors should focus only on medical value, not cost. But value isn’t just clinical benefit. It’s benefit relative to cost. A $10,000 drug that extends life by two weeks isn’t value if a $50 drug does the same thing. That’s not just economics - it’s ethics.
Doctors want to help. Patients want to get better. The system just needs to give them the right tools - and the right information.
Do most doctors know how much medications cost?
No. Studies show most clinicians significantly misestimate drug prices - overestimating cheap drugs and underestimating expensive ones. Only about 5-14% of cost estimates fall within 25% of the actual price, depending on whether the drug is generic or brand-name.
Why don’t doctors know drug prices?
Medical training rarely covers pricing. Textbooks, pharmaceutical reps, and journals focus on efficacy and safety - not cost. Plus, pricing is fragmented across insurers, pharmacies, and patient plans, making real-time access difficult without integrated tools.
Can EHR cost alerts help doctors prescribe more affordably?
Yes. Studies show that when EHRs display real-time out-of-pocket costs, 1 in 8 to 1 in 6 physicians change prescriptions - especially when savings exceed $20. These changes lead to higher medication adherence and lower patient costs.
Is there a difference between generic and brand-name drug price knowledge?
Yes. Doctors are far worse at estimating generic drug prices - overestimating them 77.5% of the time - because they assume generics are expensive. Meanwhile, they underestimate brand-name drug prices by over half, often thinking they’re cheaper than they are.
Are medical schools teaching drug pricing?
Only 1 in 5 U.S. medical schools has a formal curriculum on drug pricing. Most students graduate without understanding how prices are set, why generics cost less, or how insurance affects out-of-pocket costs.
What’s being done to fix this problem?
Leading health systems like Mayo Clinic and UCHealth have integrated real-time cost tools into their EHRs. The Inflation Reduction Act now allows Medicare to negotiate drug prices. Professional groups like the AMA and ACP have made cost-conscious prescribing a standard. But widespread adoption is still slow - only 37% of U.S. hospitals use these tools as of 2024.
