What your pharmacist can’t tell you

Drugs often cheaper without using insurance

I’VE BEEN AN INDEPENDENT PHARMACIST for 37 years and during that time I have gotten to know many patients. In some cases, I know quite a bit about their families, their medical histories, and much more.  Often, they come to me for advice on their medications and how to reduce costs and I’m happy to provide it.  Other independent pharmacists I talk with have similar experiences. Given that, imagine how hard it is for independent pharmacists when they know something that would help their patients but they can’t tell them.

This is something that policy makers who are trying to bring down the cost of healthcare should also know about.

I’m talking about paying for prescriptions and how patients could save money—something that’s top of mind for many. You see, in many instances, patients would be better off paying for their medicine without going through their insurance company.  The problem is that in many instances your pharmacist is not allowed to disclose this information. It’s all because of little-known players that have become powerful middlemen between insurers and customers.

They’re called pharmacy benefit managers (PBMs).

PBMs negotiate deep discounts and rebates from drug manufacturers ostensibly to save money and lower healthcare costs. Only you wouldn’t know it, because you may not get any benefit from those discounts because they are not passed on to you or your insurer.  PBMs originally came into play to help lower the cost of drugs.  But because they’re unregulated, these operators have flown beneath the radar.

They negotiate the price discount and then tell insurers which drugs to cover.  And they also set the price of the co-pay or co-insurance you pay when you pick up your medication. Co-pays can range from a little to a lot, sometimes hundreds of dollars depending on the medicine. From there, it’s a complicated scheme. To the dismay of your independent pharmacist, it often ends  with the PBM charging you, the consumer, more than what they charged the insurer. What happens to the difference?  PBMs take that amount and keep it for themselves.  It’s called a “clawback” because it allows them to take money that patients have paid for their medication.

For example, you go to the pharmacy to get a medication for high blood pressure. Your copayment is $10, but the medication prescribed is actually cheaper than that. The PBM might pay the pharmacy $6 to dispense the medicine.  What happens to the remaining $4?  That goes back to the PBM.  That clawback is usually on top of the profit they’re already making.

If you’re confused, you’re not alone, and it’s one of the reasons PBMs have gotten away with this for so long. Three PBM companies control 80 percent of the market and they make billions of dollars.

Why wouldn’t a pharmacist just tell you the options? Pharmacists sign contracts with PBMs containing a gag order clause that basically swears them to secrecy.  So even though I might know that you could pay less without your insurance, I’m not allowed to tell you. If a pharmacist refuses to sign the contract because of the gag order, the PBM will take its business to the next pharmacy in town.

In a survey done by the National Community Pharmacists Association last year, 83 percent of pharmacists said there were at least 10 times during the past month when patients could have saved money.

Meet the Author

Todd Brown

Executive director, Massachusetts Independent Pharmacists Association
Legislators and others are now acting to protect patients. Louisiana has passed a law that requires pharmacists to tell customers when paying out of pocket will be cheaper than going through their insurance. Connecticut is considering similar legislation. In Massachusetts, there’s a bill that would force PBMs to be more transparent about the discounts and rebates they negotiate with drug companies and the amount they charge the pharmacy for the drug.  It’s a good start.  But more should be done because there’s no reason PBMs should profit by making money off the backs of patients.

Todd Brown is the vice chair of the department of pharmacy & health systems sciences at Northeastern University and the executive director of the Massachusetts Independent Pharmacists Association.  He can be reached at tbown@mipanet.org

  • Mhmjjj2012

    Is this for real? Louisiana’s legislators get the necessity for requiring pharmacists to inform customers when paying out of pocket for prescriptions is cheaper than going through their insurance but the Massachusetts legislature isn’t even considering such a law?

  • Richard Erdman

    The most simple solution is for customers to just come right out and ask what the price for the medication would be if they paid for it themselves. The gag order covers pharmacists volunteering the information but does not stop them from answering a customer’s question regarding price. I live in a rural part of Pennsylvania and it is routine practice in my little community to ask these questions. It became rather necessary when many major prescription insurance plans started to show fluctuating prices and ever restrictive procedures like pre-approval and forcing people to go to mail order 90 day supplies which takes that business AWAY from the local pharmacy. Personally, my insurance company is nearly useless (CVS Caremark….yes I name names). They want a $48.00 co-pay and will not cover my thyroid medication at any pharmacy BUT a CVS location or mail order (from them of course) and I MUST get it in a 90 day supply even though I’m still in the dosage adjustment phase of this med. I can get the exact same med from WalMart for $4 for a 30 day supply and when I stabilize on dosage they get supply it for $10.00/90 day supply without using the insurance! My local pharmacy supplies me with my prescription Omeprizole at $20.00/90 day supply. Again….straight cash payment and no insurance involved. Spread the word to everyone you know that they ARE allowed to ask and that sometimes you DO end up paying less by just going straight out of pocket!