You may be paying too much for prescription drugs. That, in itself, is bad enough, but your pharmacist may know it and be contractually prohibited from telling you that your drugs are over-priced.
Sound illegal? Since October, at least 16 lawsuits have been filed testing the legality of a practice the pharmaceutical industry calls "clawbacks." (For more see: The Real Reason Prescription Drug Prices Are So High and 6 Reasons Healthcare Is So Expensive in the U.S.)
When you have a prescription filled at a pharmacy, you typically have a copay. The copay amount is determined by a pharmacy benefits manager (PBM) hired by your health insurer. If the prescribed drug costs less than the copay, the difference is “clawed back” by the PBM.
That means not only will you have paid the full price of the drug, but you also will have provided an additional profit to the PBM – and possibly the health insurer. If your copay is $20, for example, and the drug actually costs $5, the leftover $15 is “clawed back” by the PBM and/or insurer.
In most cases the pharmacist is contractually prohibited from voluntarily advising you of the price discrepancy. If she does, she stands to lose the contract with that particular insurer. When clawbacks occur, they are almost always associated with generic drugs since those medicines are priced the lowest. For additional insights see: What Is the Pharmacy Benefit Management Industry? (ESRX, CVS)
The Size of the Problem
A 2016 survey by the 22,000-member National Community Pharmacists Association (NCPA) revealed that 83% of pharmacists witnessed clawbacks at least 10 times per month. Insurers UnitedHealthcare/Optum Rx and Aetna employed clawbacks the most frequently, according to the survey.
A majority of respondents said they believed the clawback practice occurs in Medicare Part D plans as well as commercial insurance plans. The same (59%) majority said they encounter “gag clauses” that prohibit them from voluntarily disclosing lower priced options to patients at least 10 times per month.
Lawsuits have been filed against UnitedHealth Group Inc., owner of OptumRx benefits manager; Cigna Corp., which contracts with OptumRx; and Humana Inc., which has its own PBM.
Charges include defrauding patients via racketeering, breach of contract and violation of insurance laws. UnitedHealthcare, an operating division of UnitedHealth Group, says the lawsuits are “without merit.” Both Humana and Cigna have declined to comment on the pending litigation.
A few states have passed laws allowing pharmacists to proactively inform customers when a lower price is available; some states even require it.
What You Can Do
While awaiting the outcome of litigation or potential remedial legislative action by your state, you can act on your own to protect yourself from overpaying for prescription drugs.
Start by asking your pharmacist how much it would cost if you just paid cash. Pharmacists can provide this information if you request it. They usually just can’t volunteer it. It’s especially important to ask about the cash price if the drug is a generic since generic drugs, as noted above, are the most frequent targets of clawbacks.
Be aware that paying cash means your purchase likely won’t count against your insurance deductible. If you typically meet your deductible on an annual basis and your policy drops the copay at that point, going through your insurer might make more sense, even with the clawback.
If you do decide to pay cash, shop around. Sites like GoodRX.com and LowestMed.com make it easy to compare prices at local and online pharmacies. In addition to having comprehensive websites, both GoodRX and LowestMed provide mobile apps for both iOS and Android platforms.
The Bottom Line
Pharmacy clawbacks are gaining attention, thanks in part to lawsuits and state-level legislative action. Although the amount per transaction can be $2 or less, the money adds up. Clawback actions are believed to increase profits for PBMs and insurers by hundreds of millions of dollars per year.
If you are subject to a copay, checking prices online or asking your pharmacist about the “cash” price for your prescription can save you money and help send a message to PBMs and insurers that clawbacks are a bad idea.