Prescription Copay May Exceed Cash Cost of Some Generic Drugs

Prescription copay costs for several drugs—particularly generic ones—may exceed what the patient would pay on a cash basis without insurance coverage.

Big box stores like Walmart, Sam’s Club, Costco, and Target reportedly started to offer several generic medications at the low rate of $4 or less nearly ten years ago, according to a .

During the same time window, however, the rising costs of health insurance has forced a number of employers to offer only high-deductible health coverage plans to their employees, according to a CNN article.

These plans tend to come with a larger than average prescription copay on several of the same drugs. The prescription copay doesn’t reflect the actual market value of the drug in many instances. This situation points to the more complicated nature of how medications are priced in the U.S., according to CNN.

The primary antagonist in this unfair medical billing practice affecting the prescription copay is purportedly different depending upon who is under scrutiny at the moment.

Pharmacists blame pharmacy benefit management firms (PBMs) while those same PBMs blame the pharmacists. Assuming that the high prescription copay reflects an actual cost increase, consumers tend to blame drug manufacturers.

What is a PBM?

According to the CNN article, a PBM is an agency contracted by a given health insurance company to manage benefit claims. PBMs are the entities involved in managing claims and negotiating prices with medication manufacturers and pharmacies. Examples of these are Express Scripts, Cigna, and Optum RX.

PBMs allegedly artificially inflate the prescription copay for inexpensive drugs and later pocket the difference as profit after paying the pharmacy the small amount they are due.

Drug pricing in America might in actuality be a complicated dance between the trifecta of insurance company policy, consumer choice of retail pharmacy, and contracted PMB.

Is the Consumer the Monkey in the Middle?

The consumer, in needing to meet a high annual deductible, might not think twice about their options. They could inquire about what the pharmacy would charge them if they didn’t have insurance.

They could pay in cash to save money, but the expenditure wouldn’t be debited from the annual deductible. Most pharmacies keep insurance information electronically and process purchases accordingly which gives the insurance companies the data they need to track payments against this annual amount.

Pharmacists are often held by specific terms of contract with PBMs that prevents them from offering information regarding lower cash cost options.

In a June 2016 pharmacist survey by the National Community Pharmacists Association, this contractual gag rule was underscored by 38 percent of pharmacist respondents revealing they were forced to remain quiet when there were lower cash payment options 10-50 times in the previous month, according to the CNN article.

Unfair Medical Billing Practices in California

Some companies in the State of California are coming under scrutiny for their unfair medical billing practices. One of these medical billing practices is charging consumers a prescription copay that far exceeds the cash cost of the medication in question. In California, consumers insured under PPO plans may be the most affected by this phenomenon.

If you are a California resident, have a PPO plan, and have had the experience of paying an unfairly high generic drug copay in the last three years, you may have a legal claim. Fill out our form and one of our expert attorneys will be in touch to discuss your case in a free initial consultation.

Join a Free Unfair Medical Billing Class Action Lawsuit Investigation

If you have a PPO insurance plan in California and have (i) paid a co-pay for generic prescription drugs at Rite Aid, or another retail pharmacy; or (ii) paid a higher-than-expected deductible for a covered medical procedure, you may be qualified to participate in this class action investigation.

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