Patients overpay for their prescriptions 23 percent of the time, a recently released study from the University of Southern California found. What’s worse – some pharmacists can’t tell patients when they’re paying too much.
Knowing the parties involved is necessary to understanding how patients end up overpaying.
Insurance companies hire pharmacy benefits managers, or PBMs, to handle their drug claims. PBMs say they actually help patients because of their ability to negotiate lower prices and rebates. But the “clawback” practice now has PBMs defending their role.
PBMs “claw back” money when a patient pays a copay that is higher than the actual cost of the prescription. For example, the PBM “claws back” $6 from the pharmacy when the patient pays a $20 copay for a prescription that costs only $14.
A few dollars here and there really adds up. Researchers identified overpayments totaling more than $135 million in the six-month period they reviewed. That equates to millions of transactions in which patients would have saved money by paying out of pocket. But how are they supposed to know?
The benefit managers’ trade association previously suggested that pharmacists should simply tell patients if they would benefit from circumventing their insurance. “Not everything has to go through the plan,” said Mark Merritt, president and CEO of Pharmaceutical Care Management Association, in 2016.
But pharmacists disagree, citing contract stipulations between their pharmacies and the PBMs. These “gag orders,” as they are called, prevent pharmacists from telling patients that paying cash could save them money. If pharmacists are caught violating the rule, the pharmacy could lose its network contract—the source of a sizable portion of the pharmacy’s business.
The Pharmaceutical Care Management Association claims that “we support the patient paying the lowest price available at the pharmacy counter for the prescribed drug.”
Yet policymakers across the country aren’t leaving patients’ experience to chance. At least five states have already enacted laws protecting pharmacists’ right to inform patients about potential cost savings. Some states, like North Dakota, actually prohibit pharmacy benefits managers or insurers from charging a co-payment that exceeds the cost of the medication. More than a dozen states and Congress are considering similar legislation.
But until “clawbacks” and “gag orders” are illegal everywhere, some patients are simply stuck paying more.