Anthropic Prompt Caching Cuts Claude API Costs by 85% for High-Volume Agents

A developer running an AI agent processing roughly 4,000 daily requests reduced API costs from $47 to $6.80 per day by enabling Anthropic's prompt caching feature on a 2,800-token system prompt. The feature works by storing a prefix of the message at the API level, so repeated tokens are served from a cache rather than reprocessed through the full model. Cached tokens are billed at $0.30 per million — a 90% discount versus the standard $3.00 per million input rate — though an initial cache-write premium of $3.75 per million applies on the first call or after a cache miss. The cache remains valid for five minutes and resets its timer on each hit, making it most cost-effective for agents called frequently and continuously. High-value use cases include large system prompts, tool definitions, few-shot examples, and repeated document analysis, while requests spaced more than five minutes apart may see little or no benefit.