[UPDATED at 12:40 p.m. ET on March 13]
As a well being economist, Karen Van Nuys had heard that it’s generally cheaper to pay money on the pharmacy counter than to place down your insurance coverage card and pay a copay.
So at some point, she requested her pharmacist how a lot her prescription would value if she didn’t use her well being protection and paid money.
“And sure enough, it was [several dollars] below my copay,” Van Nuys stated.
Van Nuys and her colleagues on the University of Southern California Schaeffer Center for Health Policy & Economics determined to launch a first-of-its-kind research to see how typically this occurs. They discovered that prospects overpaid for his or her prescriptions 23 % of the time, with a mean overpayment of $7.69 on these transactions.
The USC study, launched Tuesday, analyzed the costs that 1.6 million individuals paid for 9.5 million prescriptions within the first half of 2013, based mostly on knowledge from Optum Clinformatics, an organization that sells anonymized claims data for analysis, and National Average Retail Price (NARP) knowledge, which contained drug costs paid by insurers and was based mostly on a nationwide survey of pharmacists.
It confirmed that the overpayments totaled $135 million throughout that six-month interval.
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The follow of charging a copay that’s increased than the total value of a drug known as a “clawback” as a result of the middlemen that deal with drug claims for insurance coverage firms primarily “claw back” the additional dollars from the pharmacy. (The middlemen, often called pharmacy advantages managers, embody Express Scripts, CVS Caremark and OptumRx.)
Here’s the way it works: After taking your insurance coverage card, your pharmacist says you owe a $10 copay, which you pay, assuming that the drug prices greater than $10 and your insurance coverage is overlaying the remaining. But unbeknownst to you, the drug really value solely $7, and the PBM claws again the additional $three. Had you paid out-of-pocket, you’ll have gotten a greater deal.
Until Van Nuys and her colleagues went digging, nobody knew how frequent the follow was.
“Clearly this is going on [at a] much higher frequency than most people imagine,” stated Geoffrey Joyce, who directs well being coverage on the heart and was a coauthor on the research. “You’re penalizing people for having insurance.”
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The findings cowl solely a small portion of the inhabitants over a short while span, so they may not be completely reflective of what’s happening nationally, Joyce stated. But they debunk the notion that clawbacks are uncommon.
Steve Hoffart, who owns Magnolia Pharmacy, an unbiased compounding and retail pharmacy in Magnolia, Texas, stated clawbacks are nonetheless occurring — although Texas legislators handed a regulation to ban them. Hoffart stated he collects and sends $1,100 or $1,200 a month in clawbacks to the PBMs.
The National Community Pharmacists Association, of which Hoffart is a member, stated the brand new analysis “is illustrative of just one of many ways that PBMs’ lack of transparency disadvantages pharmacy patients. … If you want to reduce prescription drug costs, policymakers must demand greater transparency from PBMs.”
The commerce group for the PBMs, the Pharmaceutical Care Management Association, stated that general the PBMs deliver down the whole value of prescribed drugs, decreasing prices for sufferers and insurers.
“We support the patient paying the lowest price available at the pharmacy counter,” the group stated in an announcement.
The USC researchers discovered that brand-name medicine had the best clawbacks — a mean overpayment of $13.46 per prescription. Clawbacks on generic medicine have been $7.32, on common. The drug with probably the most frequent clawbacks was zolpidem tartrate — generic Ambien, a drug used to deal with insomnia.
Although the analysis staff was in a position to get hold of copay knowledge, it didn’t have knowledge on what the PBMs paid for the medicine, stated Van Nuys, the lead research creator and government director of the Schaeffer Center’s life sciences innovation mission. As a stand-in, the reserachers used the National Average Retail Price knowledge, which existed for a brief interval in 2013. They included clawbacks solely of $2 or extra.
Sometimes, the clawbacks are beautiful. The day earlier than Hoffart testified in favor of Texas’s new anti-clawback regulation, a affected person was charged a $42.60 copay for a generic model of simvastatin, a statin drug. The affected person may have paid $18.59 out-of-pocket, and the clawback was $39.64, Hoffart stated, including that the clawback made him lose cash on the transaction.
Patients typically aren’t instructed they may pay much less with out utilizing insurance coverage until they ask.
“If they don’t ask, they’re not going to get the information they need,” Hoffart famous.
But even then, some insurance policy prohibit pharmacists from telling sufferers on account of gag clauses. Six states have prohibited the gag clauses and 20 extra are contemplating comparable laws, based on the National Conference of State Legislatures.
KHN’s protection of prescription drug improvement, prices and pricing is supported by the Laura and John Arnold Foundation.
[Clarification: This story and headline were updated to clarify that the study did not compare consumers’ copayments to the cash price of the medication. Rather, researchers compared the copay to what a patient’s insurer paid for a drug.]
Sydney Lupkin: email@example.com”>firstname.lastname@example.org, @slupkin