Why you may be overcharged for prescription drugs

BOSTON — We all hope health insurance saves us money in the long run, especially when it comes to prescriptions drugs. But in some cases, your co-pay could be costing you more than the drug itself.

Clawbacks, as they're called, could be forcing you to pay more than you should.

Critics say it is a money grab that’s happening prescription by prescription, at thousands of drug stores across the country.

The alleged deception involves companies known as pharmacy benefit managers, which act as the middlemen between health insurers and drug companies.

PBM’s negotiate drug prices for insurance companies and then set the co-pays consumers pay at the drug store.

“What consumers don't know potentially about 10% of the time, is te amount they could pay out of pocket, without using their health care insurance, is lower than the amount they're being charged using their insurance,” said Springfield Democrat State Senator James Welch.

In other words, the cost of the drug dispensed is lower than the co-pay the consumer is charged.

“If you are paying more than the drug actually costs you are paying all of the cost, plus some,” said attorney Henry Quillen of Whatley Kallas LLP.

That "plus some" is going back to the pharmacy benefit manager, in what is known in the industry, as a "clawback."

And the consumer likely never knows it's happening.

MORE: Prescription Problems: Not what the doctor ordered

“Some of these PBM contracts prohibit the pharmacy from telling the patient,” said Northeaster professor Todd Brown, RPh.  “It's deceptive. I believe that it's wrong.”

Not every pharmacy benefit manager practices clawbacks.

Boston 25 News contacted the five largest in the country.

CVS Caremark tells Boston 25 News it does not do clawbacks.

The nation's largest PBM, Express Scripts, calls it an 'anti-patient practice'

The other three companies did not respond.

Some might view the money that pharmacy benefit managers are making on clawbacks as simple profit. But several lawsuits claim clawbacks actually violate federal law.

In Massachusetts, the issue of clawbacks has drawn the attention of State Senator Welch.  He's introduced legislation that would require pharmacies to inform consumers if the "cash price" would be lower than the co-pay, and to charge that lesser amount.

“It's really bringing to light the situation and I do think that if there's an opportunity to pay less for a product without using your insurance product you should have the ability to do so,” said State Senator Welch.

To make sure you're getting the best price, always ask the pharmacist whether the cash price would be less than the co-pay. If they tell you yes, ask to pay "out of pocket" instead.

Cox Media Group