Some Prescription Copays Higher Than Actual Price of Drug, Wall Street Journal reports
Some copayments for prescription drugs are higher than pharmacy benefit managers actually pay for the medications, the Wall Street Journal reports. More than 200 million people have their medications covered by a PBM, which negotiates discounts with pharmacies and then passes on those savings to consumers and employers. Customers contribute a copayment, and employers are billed for the remaining cost. PBMs have been "so aggressive" in negotiating discounts that they now pay prices for medications that are sometimes lower than customers' copays, the Journal reports. PBMs either keep the difference or allow the pharmacy dispensing the medication to keep it. The companies are most often able to negotiate discounts lower than copays for common generic drugs rather than brand-name medications. Two of the country's largest PBMs -- Express Scripts and Merck-Medco -- routinely let pharmacies charge the full copay even if the price the PBMs pay for the drug is lower, the Journal reports. PBMs say the number of times they pay less for a medication than the amount of a copay is "rare." Walgreen Co. and CVS Pharmacy, two of the largest pharmacy chains in the country, say they need the extra money to cover overhead costs. The average copay under a PBM still "work[s] out well for consumers," the Journal reports. The average retail cost of a brand-name drug is $70, and generics cost $20 on average. In comparison, the average copayment is under $20 for brand-name drugs and under $10 for generics. There is "not much customers can do" to stop the practice, the Journal reports. Pharmacies are not bound by law to charge the price negotiated with the PBM; they are required only to charge the lower of the retail cost or copayment (Martinez, Wall Street Journal, 9/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.