That Drug May Be Cheaper If You Pay Cash Instead of Using Your Drug Plan
By Mary Johnson, editor
Before filling your next prescription, here’s a tip. Call four pharmacies that you typically deal with and, without identifying yourself, ask their cash price for the drug, saying “you do not have insurance” if asked about your drug coverage. About one time out of four the price quoted may be lower than your drug plan’s co-pay. If the price difference is large enough, it may be worth asking your doctor to send your prescription to the pharmacy with the lowest price and paying for it yourself out-of-pocket, rather than automatically sending your prescription to one of your drug plan’s network pharmacies.
Calling in advance is important because you aren’t likely to learn the real costs of the drug once you are actually at the pharmacy counter. “Gag clauses” are forcing pharmacists and their staff to keep quiet about cheaper cash prices that may be lower than your co-pay. For example, the common antibiotic, amoxicillin, is one of the cheapest and most widely-used drugs. The cost to the pharmacy is about $2.00 for 100 mg of liquid. A typical co-pay, however, could be $20, meaning the consumer would overpay $18. Pharmacies could save consumers money by giving them the information up front, but they risk their contracts with insurers and the big pharmaceutical benefit managers (PBM) that act as middlemen to negotiate prices with drug manufacturers. Most of the price difference is pocketed by insurers and the PBMs rather than returned to the consumer, currently.
Researchers from the University of Southern California Schaeffer Center For Health Policy & Economics launched a study that found that customers overpaid for their prescriptions 23 percent of the time, with an average overpayment of $7.69. Savings on brand drugs was higher than generics.
States across the country are moving to stop these gag clauses that prevent pharmacists from telling their customers when they could save money by paying cash instead of the co-pay charged by their insurance company. At least six states have adopted laws to make sure pharmacists can inform customers about the less expensive option to fill prescriptions. At least 26 other states are considering legislation to prohibit gag clauses according to the National Conference of State Legislatures.
TSCL believes that no PBM or insurer should be allowed to charge a co-payment that exceeds the actual cost of a medication and that Medicare law should be changed to ensure that beneficiaries receive the lowest price. TSCL supports two bills, the Patient Right to Know Drug Prices Act, and the Know the Lowest Price Act introduced by Senators Susan Collins (ME), Claire McCaskill (MO), and Debbie Stabenow (MI) that would prohibit health insurers and pharmacy benefit managers from using gag clauses, and would allow pharmacies to tell you when the retail cost is lower than your co-pay, a step forward in reducing drug costs for Medicare beneficiaries.
For more ways to save on prescription drugs, watch this video from Consumer Reports: “Don’t Bother Paying More For Prescription Drugs”.
Sources:
“Why Your Pharmacist Can’t Tell You That A $20 Prescription Could Cost Only $8,” Robert Pear, The New York Times, February 24, 2018. “Patients Overpay For Prescriptions 23% Of The Time, Analysis Shows,” Sydney Lupkin, Kaiser Health News, March 13, 2018. “Gag Clause Keeping Pharmacies From Revealing Lower-Cost Drug Options,” Kiet Do, Sanfrancisco.cbs.com, February 28, 2018.
