Drug Copay Clawbacks are a Silent Scam

Dawn Allen — March 6, 2017

Drug copay clawbacks are a symptom of dysfunction in the American health care system. Public domain photo by C. Todd Lopez, courtesy of Wikimedia Commons.

How many people are scammed every day by drug copay clawbacks? When you take your doctor’s prescription to a pharmacy to be filled, you’re probably thinking mostly of your health. However, behind the scenes, questionable pricing practices may take advantage of people who want to stay healthy or get better when they’re sick.

How many people are scammed every day by drug copay clawbacks? When you take your doctor’s prescription to a pharmacy to be filled, you’re probably thinking mostly of your health. However, behind the scenes, questionable pricing practices may take advantage of people who want to stay healthy or get better when they’re sick.

Here’s how people end up paying too much for some prescription drugs. Some medicines, such as generics or common, easy-to-produce drugs, actually cost very little. Because the insurance company covers the prescription, though, people seldom question the price and assume that their insurance picks up the tab for most of the cost. If the medicine costs less than the $10 or $20 copay, what happens to the difference? The middleman, a “Pharmacy Benefit Manager” (PBM), may pad their profits with the extra few dollars you pay for each inexpensive prescription! Drug copay clawbacks mean that if you pay $20 for a $2 drug, the PBM grabs an extra $18 on top of any administrative fees they charge your insurance company. Ironically, this means that uninsured customers, or those who decline to use their insurance, may pay significantly less money to fill some prescriptions.

PBMs stand in the middle of a complex web of transactions affecting how people get medicines they need. They link insurance companies, pharmacies, and drug makers. They also negotiate prices and drug availability, deciding which drugs to cover and how much those drugs finally cost. Each transaction that passes through a PBM generates some revenue for that company. Some PBMs even repackage and distribute prescription medications to consumers directly, significantly increasing profits. The largest PBMs dwarf other large, famous companies, yet they remain largely unknown outside of the industry.

Pharmacy Benefit Manager (PBM) Games by RxPreferred Benefits

The really perverse thing about the contracts between PBMs and pharmacies is the gag order that silences pharmacists. When you stand at the counter shelling out twenty bucks for a two dollar prescription, your pharmacist knows what’s going on. They don’t like it very much either, but they’re not allowed to tell you unless you ask them directly. So, next time you’re filling a prescription, it couldn’t hurt to ask if it would be cheaper to pay cash. Not only could you save significant money, there’s also the added benefit of denying the PBMs their drug copay clawbacks.

When you’re sick and you need medicine, you should be able to trust your pharmacist to provide good information. They can’t tell you everything you need to know if they are obligated to remain silent while you’re getting scammed. You should also be able to trust your insurance company and the PBM to act faithfully on your behalf. Would that this were so! While all companies need to make money to cover their expenses and pay employees, though, for-profit PBMs are not absolutely necessary. In many other countries, the government serves in the role of negotiator between all of these entities. Acting in the public interest instead of as a profit center, a government or other more transparent, accountable entity would have far less motivation to engage in drug copay clawbacks, but here, it’s the American way.

The American health care system covers more people than it used to before the Affordable Care Act, but it’s still fundamentally flawed. Drug copay clawbacks are merely a sign of systemic dysfunction. We all deserve better.