High Cost Cure: How to be sure you aren't paying too much for prescriptions
SOUTH BEND, Ind. – ABC 57 News is digging into a new warning from pharmacists across Northern Indiana and Southwest Michigan. Some say you may be paying more than you need to for your prescription medications. ABC 57 is working for you to let you know about the one question you can ask that may save you money at the pharmacy.
“I have to be on this medication, or I could have another clot with the blood thinners that I take. I take depression medicine. I take Crestor. I take some other stuff for cholesterol. The only thing I’m good at, I don’t have high blood pressure,” Consumer John Maurow said.
Many of us or our family members are dealing with some health issues. And most of us are probably under the impression our insurance coverage is saving us money.
“I get seven or eight prescription drugs and I only pay like $25,” Maurow said.
But it turns out, that’s not always the case. There are two reasons why. The first, direct or indirect remuneration fees, or DIR fees. The second, is what’s called a “copay clawback.”
Hometown Pharmacy Vice President Jon Grice sat down with us to explain both. He’s a third generation pharmacist in Michigan. His grandfather opened the family’s first store in 1982. Today, Grice oversees 36 retail pharmacies, including many here in Michiana.
He says these DIR fees, which are charged to your local pharmacy, are hurting the patients bottom line the most.
“A lot of people don’t understand that these fees are built into the price that they’re paying in their copay,” Grice said.
Here’s how it works.
Pharmacy Benefit Managers, or PBMs, help to negotiate the prices and contracts between insurance companies and pharmacies, essentially acting as a middleman.
In the case of DIR fees, PBMs may take back a certain amount of money from a pharmacy, months after the point of sale.
“Sometimes what these may be designed to do for the pharmacy benefit manager, or the PBM, is to recoup some of their costs that go on and go toward that drug spend. What ends up happening is they sometimes are able to keep premiums lower, but the net effect is that it keeps the costs of care higher in the end,” Grice said.
The second way PBMs make money on your prescriptions is through what’s called a “copay clawback.”
Here’s how the National Community Pharmacists Association describes the practice to us:
A copay clawback occurs when a PBM charges the patient a copay or cost share at point-of-sale that is higher than the price the PBM negotiated with the pharmacy for the medication, and the PBM (NOT the pharmacy) keeps the difference for itself. In other words, the PBM “claws back” the excess of the patient’s copay. -NCPA
The NCPA provided us with this example, using a common medication called “Sprintec.”
Let’s say you go to your pharmacy to pick up your prescribed Sprintec. The pharmacist runs the transaction, and it shows if you pay with your insurance plan’s copay, you owe $50 at the point of sale.
Let’s say the pharmacy’s contract with the PBM mandates the pharmacy be reimbursed $12 for that Sprintec.
That contract may also mandate your pharmacist charge you the full $50 copay, even if the actual cost of the drug is cheaper.
Then, the PBM would require the pharmacy to send the $38 difference back to the PBM, who pockets it as a profit.
“What looked like it was a clean claim with a profitable margin to it, ends up putting the pharmacy under water, sometimes cutting into that patient’s portion that they paid,” Grice said.
According to a University of Southern California research report just released in March, these types of “clawbacks” happened in 23 percent of filled prescriptions in the year 2013. That amounts to $135 million in overpayments by you the consumer.
“For the elderly, or for people who are on a fixed income like my mom, it’s still a major expense,” Consumer Darryl Thompson said.
Experts say that averages out to an overpayment of nearly eight dollars. If you fill a prescription every 30 days, that’s almost $100 more a year you’re paying than you might need to.
“As you get older, you start getting new conditions and new conditions, so those add up quick… when you start trying to fill so many medications, you know you kind of lose track. And it’s like, well, I’ve got to have it so I just won’t buy this gallon of milk this week. Or I’ll have to cut and split my pills to try to stretch them out so they last even longer,” Thompson said.
Why haven’t you heard about this before? Some pharmacists say that’s because of “gag clauses,” requiring pharmacists to keep quiet.
We reached out to several PBMs to get their take on these practices. We heard back from two.
The following is a statement from Express Scripts:
Express Scripts doesn’t support copayments that exceed a drug’s cash price and this practice isn’t part of how we do business. This relates to our competitors.
Because we use lesser-or logic in our retail network agreements, there’s never an instance where a pharmacist or pharmacy would need to tell a patient about a lower cost by paying cash because the prescription will process automatically at the lowest cost. Nevertheless, we don’t support “gag clauses” in this way. We have written bills in several states (e.g. Louisiana, Arkansas, Texas) to prohibit these practices, because we think it’s anti-patient and anti-payer. – Spokesperson Jennifer Luddy
The following is a statement from CVS Caremark:
CVS Caremark does not engage in the practice of copay clawbacks. If a PBM plan member’s copay for a drug is greater than the dispensing pharmacy’s contracted rate, it is not our practice to collect that difference from the pharmacy.
In addition, we do not prevent pharmacies from discussing the availability of a lower drug price for cash-paying patients with members and, in fact, our PBM members always get the benefit of at least the lower of the pharmacy’s cash price and the plan’s co-pay.
In fact, we recently announced our support of the Patient Right to Know Drug Prices Act. – Spokesperson Michael DeAngelis
The Patient Right to Know Drug Prices Act was introduced in the Senate last month. It’s now in committee, awaiting approval.
So, how can you make sure you’re not paying too much? Grice says always ask questions.
He says often, pharmacy techs can inform you of a cheaper option, if you ask.
“Ask your pharmacist is always the right answer I think. Talking to them about my own medication profile, what can I do to limit my costs?” Grice said.
Grice also suggests getting involved by asking your local lawmakers about these types of practices.
Right now, the NCPA confirms Connecticut, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Maryland, North Carolina, North Dakota, Ohio, Texas, Utah, and Virginia have passed legislation prohibiting pharmacy copay clawbacks.
And they say Arkansas, Connecticut, Florida, Georgia, Indiana, Kansas, Maine, Minnesota, Mississippi, Nevada, North Carolina, North Dakota, Ohio, South Dakota, Utah, Virginia, and West Virginia have implemented laws to ban gag clauses.
They tell me Indiana is actually one of the most recent states to take action. The Hoosier state passed legislation against both practices last month. That law takes effect July 1, 2018.