Most people have insurance because among many things, insurance companies are supposed to reduce costs of medications and provide coverage. However, further investigation into the world of insurance companies shows that this does not happen in many cases. A copay is when a person pays a fraction on the costs. This is standard in insurance policies, but evidence from numerous pharmacies show that companies are charging copays that exceed the value of drugs, increasing costs for customers.
This method is called a clawback. Basically, a clawback is when an insurance company claws back money from patients. According to a New Orleans Fox affiliate, Fox 8 Live News segment, patients most likely don’t even realize this method is implemented by companies because they often times do not know the costs of their drugs without insurance.
The investigative report by the news organization shows a breakdown of a clawback using a document given to the news station by a pharmacist. The document shows all costs for the drug Sprintec, a contraceptive and acne treatment. It shows the cost of the drug, tax, and the pharmacist’s fee. All charges total $11.65. However, the customer was charged a $50 required copay. The document also highlights that $38.35 was sent back to the insurance company’s pharmacy benefit manager.
So in total, the patient paid $50, and an additional monthly premium for the privilege to pay the discounted copay. But in reality, nearly 80% of that co-pay was returned to the PBM via the clawback or DIR fee. The acquisition cost of Sprintec is very likely more than the $11.65 the pharmacy was left with, and less than the $50 copay the patient forked over. This is an example of a lose/lose scenario, where the patient overpays for a medication, and the pharmacy is paid less than their acquisition cost. No one benefits from this scenario, except for the PBM.
Unfortunately, many times, pharmacists are contractually banned from telling customers about cheaper alternatives to clawbacks, which is why all pharmacist submissions to the news investigation were anonymous. If a copay is required, the pharmacist must charge the patient. Occasionally pharmacists are not aware of these fees at the time the medication is dispensed, and the fees are assessed by the plan and PBM periodically throughout the year, during “reconciliations” that occur months after drugs are dispensed to patients One anonymous source told Fox 8 that they are not allow to discount or forgive the copay under any circumstances. Essentially, the customer is paying more to acquire the drug even with insurance. This practice is unsettling because it essentially defeats the purpose of having insurance.
Overall, the copay is not even a fraction of the cost of the drug when it comes to clawbacks because customers are actually paying more than they should. The clawback is a symptom of the lack of transparency that is pervasive in the healthcare industry. There is bipartisan support in Congress for “negotiated price” guidance because it is in the best interests of the taxpayer, independent pharmacists, and good fiscal management. However, no legislation has been passed at the federal level. Community pharmacists support efforts to bring forth further transparency in order to prevent clawbacks. Thankfully, clawbacks do not occur on every medication. Nonetheless, it’s advisable for patients to research or ask what the actual cost of their medication is in order to compare prices with and without insurance coverage. If there is such a discrepancy, it might be best to consult with a pharmacist on changing your Medicare Part D plan to better accommodate your needs and avoid costly clawbacks.