Santa Claws

  • by: Peter Pitts |
  • 03/14/2018
If drug manufacturers are giving such large discounts for brand name medicines to Pharmacy Benefit Managers (PBMs); while prices of commonly used generics keep going down, why aren’t co-pays going down and why, in some circumstances, are they going up – even for generic medicines?

In short, where’s the money going?

The answer, according to a new study just published in the Journal of the American Medical Association, Frequency and Magnitude of Co-payments Exceeding Prescription Drug Costs, is … from the purses of patients into the pockets of the PBMs.

Per the JAMA article:

Pharmacies collect patients’ co-payments and pass them to PBMs, who reimburse the pharmacy a negotiated rate to cover drug costs, dispensing fees, and any markup. Overpayments occur when the co-payment exceeds the negotiated reimbursement.

The scheme is called “claw-backs.”

Per JAMA:

However, drug co-payments sometimes exceed costs, with the insurer or pharmacy benefit manager (PBM) keeping the difference. Furthermore, some pharmacists are contractually prevented from alerting patients when their co-payment exceeds the drug’s cash price. Although some have argued that the practice is uncommon, a 2016 survey of independent pharmacists indicates otherwise.

No, you read that correctly, PBMs lock-in these claw-backs, going so far as to contractually gag pharmacists who want to help patients lower their drug costs.

Some of the study highlights include:

* Among 9.5 million claims, 2.2 million (22.94%) involved overpayments.

(That means that almost 1 out of 4 prescriptions involved a patient copayment that exceeded the average reimbursement paid by the insurer. The vernacular for this is – stealing.)

* The most commonly prescribed drug, hydrocodone/acetaminophen, involved an overpayment on 36.15% of claims.

(Could this explain why PBMs make time-consuming prior-authorization for abuse-deterrent opioids and non-opioid pain alternatives such common practice?)

* Overpayments were common in this data set, affecting 23% of all prescriptions, and 28% of generic prescriptions.

(Price gouging on generics! Shameful.)

* In 2013, total overpayments by patients amounted to $135 million in the sample studied

The authors conclude:

Cost-related nonadherence is common and associated with increased medical services use and negative health outcomes. By raising patient costs at the point of sale, overpayments may exacerbate these effects. To lower patient expenses, legislation addressing overpayments and gag clauses warrants further investigation.

Amen.
CMPI

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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