NEW YORK — Seniors are discovering that paying for prescription drugs can be a bitter pill to swallow.

Shelling out for prescription drugs is making a sizeable dent in some retirees’ nest eggs: one in four middle-income retirees spends $1 out of every $10 of monthly retirement income on medications alone, with many in the dark about how to reduce these expenses, according to a study released Tuesday and commissioned by Medco Health Solutions Inc. (MHS), a pharmacy benefits manager.

And one in three retirees polled said they are spending far more on their health care and prescription drugs than they expected, with more than half saying that they completely overlooked medical expenses — which are rising much faster than inflation — when they were planning for their retirement needs.

Fortunately, while it may be too late for retirees to plan, it’s not too late for them to act to cut monthly expenses for medications, experts say. Speaking to your physician about less expensive alternatives to your current medication and optimizing doses you take can make a big difference, as can making changes to how you get medications.

And with enrollment in Medicare prescription-drug plans for 2008 about to start, now has never been a more important time for seniors to think about what prescription drugs they take and how much they are likely to cost under different plan options.

“Retirees can save a bundle just by switching from brand name drugs to generic alternatives, which will be every bit as effective and safe,” says Sally Greenberg, executive director of the National Consumers League, a consumer advocacy group in Washington.

Savings from switching to generics can run from $2,300 to $5,000 a year depending on the number of prescriptions and types of medication, according to the Consumer Reports Best Buy Drugs research (www.bestbuydrugs.org). That’s a lot of money, especially if you are living on a fixed income of $30,000 a year or less, she adds.

Cost-Saving Strategies

There are a number of other strategies retirees can employ to reduce their drug costs, but the problem is that many retirees are either unaware of them or reluctant to use them. That’s the main reason why the National Consumer League and Medco are launching a national effort to educate retirees on the importance of actively managing their drug expenses and how to cut their monthly drug costs (www.medicaredadvisor.com).

For example, three out of four retirees polled indicated they were aware of the cost savings benefits of getting their drugs from a mail order pharmacy, but only 40% of retirees said they use this tool to reduce costs.

Woody Eisenberg, chief medical officer of Medco’s Retiree Solutions, says the prospect of using mail order can be a little daunting for the elderly, but it’s actually quite simple to set up. You just mail in your prescription along with name, address and other details. Once you are set up on the system, the mail order company takes the initiative, and will send you advance reminders about prescription refills and renewals. And the savings can be considerable. For example, you might pay just a few dollars for a 90-day prescription of a generic drug compared with dozens of dollars for the same prescription if you pick it up at a pharmacy. The dollar differential for brand name drugs is even bigger, says Eisenberg.

Optimizing drug doses in consultation with a physician is another strategy that can help seniors save money — but only 13% of retirees indicated that they were aware they could take fewer pills or capsules at a higher dose in order to reduce the number of pills or capsules they would need to buy.

In addition, when picking a Medicare prescription-drug plan, 40% of respondents said their primary factor for choosing a plan is the price of the premium, while only 15% consider the range of drugs offered.

“By looking just at the premiums, you can be penny wise and pound foolish,” says Greenberg. “We encourage seniors to line up their prescriptions, call the plans and ask them what they cover and at what percentage.”

The national survey of 1,000 Americans over age 65 was conducted for Medco by Directive Analytics.