Why You Should Ask Your Pharmacist About 'Clawbacks'
Depending on your insurance, getting a prescription filled might involve paying a copayment of $10, $25, or $50 — depending on the medication. You'd assume that this copayment is your part of paying for your medication, while your insurance company picks up the rest through your premiums. You'd also assume that you'll pay the same amount for your medication at one pharmacy versus another. But it's a lot more complicated than that.
Pharmacy Benefit Managers (PBM) are essentially middlemen who negotiate the price of your medication with both the pharmaceutical company, your insurance company, and their network of pharmacies (via Reader's Digest). They'll also decide your copayment. Sometimes your copayment is higher than the actual price of the drug itself, so the PBM will "claw back" the extra money for themselves. Rather than use your insurance, you should ask your pharmacist for the retail cost of the drug without insurance to avoid paying a clawback.
Some pharmacies can't tell you about clawbacks
Here's an example of how a clawback might work. Your medication might have a $15 copay for a generic drug, even though the drug itself might only cost the pharmacy $2. The PBM might reimburse the pharmacy $7, meaning the pharmacy gets a $5 profit. The PBM gets the remaining $8. Even though the price of the medication is lower, PBMs sometimes have a gag clause with their pharmacies, which means your pharmacist can't tell you that it would be cheaper for you to pay the retail price for the drug rather than use your insurance.
Some states have banned these overpayments to the PBMs, such as Maryland, Arkansas, and Louisiana. Other states like Minnesota, Georgia, and Connecticut have banned these gag clauses. An investigation by the University of Southern California found that people might pay $10 more than the retail price for the acid reflux medicine omeprazole and $14.56 for the cholesterol medication Crestor. Fluticasone propionate, which is an allergy nasal spray, has seen overpayments of $17.55, while albuterol sulfate for breathing problems might have a $19.95 clawback.
What you can do about your prescription drug costs
U.S. Senators introduced the bipartisan Pharmacy Benefit Manager Transparency Act of 2023, which would prohibit clawbacks and make PBMs report to the Federal Trade Commission how much they make in these fees. Bill sponsor Sen. Maria Cantwell said in a press release that 80% of the prescription drug market is controlled by three PBMs, OptumRx, CVS Caremark, and Express Scripts.
You can do a little research on your own to find lower prices on your prescription drugs without insurance. If you're taking fluticasone propionate for your allergies, you probably don't need to pay more than $20 at your local pharmacy, according to GoodRx. While Walgreens might charge you $23, you can get a coupon for the drug to pay $13.43 at Rite Aid. Mark Cuban's CostPlus Drug Company negotiates with drug manufacturers directly and is transparent about how it sets the prices of its drugs. It sells the same allergy medicine for $8.44.