Posted: August 11, 2017
As patients, providers, and politicians alike look for answers to the soaring cost of prescription drugs, some patients have taken matters into their own hands. A series of lawsuits have popped up across the country targeting pharmacies and their relationship to pharmacy benefit managers. Two patients have brought suit against CVS Health Corp. and Walgreens Boots Alliance Inc., alleging that they were charged more than the cost of the medicine they were purchasing.
Far from a pricing error, the patients claim that their overpayment is the result of purposeful collusion between pharmacies and pharmacy benefit managers (PBMs). The lawsuits contend that their copayments exceeded the actual cost of the drugs they were purchasing by a substantial margin. Had they paid with cash instead of using insurance, they would have incurred significantly lower costs. While the lawsuits have named the pharmacies themselves as their target, a large amount of the blame for this situation may be held by the PBMs that hold contracts with the pharmacies.
The patients feel gouged by the pharmacies for not informing them there was a cheaper way to purchase their medication, but the pharmacy may be contractually obligated to not inform consumers of the price discrepancy. Indeed, the pharmacies themselves also may not retain any of the price differentials for themselves. Instead, the contracts stipulate that PBMs are awarded the difference in price. This practice, known as a “clawback,” is one of the many ways that PBMs drive up the prices of prescription drugs.
It may be the case that the contracts pharmacies have entered into are undesirable for patients, but in many cases they have little choice. Three PBMs have the vast majority of insurance plans in their portfolios, and refusing their terms would be financially disastrous for the pharmacies. In some cases, the PBM and pharmacy are a part of the same ownership group.
CSRO is proud to be part of a leadership group that seeks greater transparency and insight into the practices of PBMs, and how they affect the cost of prescription drugs. This group, the Alliance for Transparent and Affordable Prescriptions, looks forward to advocating on behalf of patients. You can get involved by following the link above.
