Two years ago Gretchen Liu, 78, had a transient ischemic attack — which experts sometimes call a “mini stroke” — while on a trip to China. After she recovered and returned home to San Francisco, her doctor prescribed a generic medication called telmisartan to help manage her blood pressure.

Liu and her husband Z. Ming Ma, a retired physicist, are insured through an Anthem Medicare plan. Ma ordered the telmisartan through Express Scripts, the company that manages pharmacy benefits for Anthem and also provides a mail-order service.

The copay for a 90-day supply was $285, which seemed high to Ma.

“I couldn’t understand it — it’s a generic,” said Ma. “But it was a serious situation, so I just got it.”

A month later, Ma and his wife were about to leave on another trip, and Ma needed to stock up on her medication. Because 90 days hadn’t yet passed, Anthem wouldn’t cover it. So during a trip to his local Costco, Ma asked the pharmacist how much it would cost if he got the prescription there and paid out of pocket.

The pharmacist told him it would cost about $40.

“I was very shocked,” said Ma. “I had no idea if I asked to pay cash, they’d give me a different price.”

Insurance copays are higher than the cost of the drug about 25 percent of the time, according to a study published in March by the University of Southern California’s Schaeffer Center for Health Policy and Economics.
Ma’s experience of finding a copay higher than the cost of the drug wasn’t that unusual. Insurance copays are higher than the cost of the drug about 25 percent of the time, according to a study published in March by the University of Southern California’s Schaeffer Center for Health Policy and Economics.

USC researchers analyzed 9.5 million prescriptions filled during the first half of 2013. They compared the copay amount to what the pharmacy was reimbursed for the medication and found in the cases where the copay was higher, the overpayments averaged $7.69, totaling $135 million that year.

USC economist Karen Van Nuys, a lead author of the study, had her own story of overpayment. She discovered she could buy a one-year supply of her generic heart medication for $35 out of pocket instead of $120 using her health insurance.

Van Nuys said her experience, and media reports she had read about the practice, spurred her and her colleagues to conduct the study. She had also heard industry lobbyists refer to the practice as “outlier.”

“I wouldn’t call one in four an ‘outlier practice,’” Van Nuys said.

“You have insurance because your belief is, you’re paying premiums, so when you need care, a large fraction of that cost is going to be borne by your insurance company,” said Geoffrey Joyce, a USC economist who co-authored the study with Van Nuys. “The whole notion that you are paying more for the drug with insurance is just mind boggling, to think that they’re doing this and getting away with it.”



Joyce told PBS NewsHour Weekend the inflated copays could be explained by the role in the pharmaceutical supply chain played by pharmacy benefit managers, or PBMs. He explained that insurers outsource the management of prescription drug benefits to pharmacy benefit managers, which determine what drugs will be covered by a health insurance plan, and what the copay will be. “PBMs run the show,” said Joyce.

In the case of Express Scripts, the company manages pharmacy benefits for insurers and also provides a prescription mail-delivery service.

Express Scripts spokesperson Brian Henry confirmed to PBS NewsHour Weekend the $285 copay that Ma paid in 2016 for his wife’s telmisartan was correct, but didn’t provide an explanation as to why it was so much higher than the $40 Costco price. Henry said that big retailers like Costco sometimes offer deep discounts on drugs through low-cost generics programs.

USC’s Geoffrey Joyce said it is possible that Costco negotiated a better deal on telmisartan from the drug’s maker than Express Scripts did, and thus could sell it for cheaper. But, he said, the price difference, $285 versus $40, was too large for this to be the likely explanation.

Joyce said it is possible another set of behind-the-scenes negotiations between the pharmacy benefit managers and drug makers played a role. He explained that drug manufacturers will make payments to pharmacy benefit managers called “rebates.”

Rebates help determine where a drug will be placed on a health plan’s formulary. Formularies often have “tiers” that determine what the copay will be, with a “tier one” drug often being the cheapest, and the higher tiers more expensive.

Pharmacy benefit managers usually take a cut of the rebate and then pass them on to the insurer. Insurers say they use use the money to lower costs for patients.

Joy said a big rebate to a pharmacy benefit manager can mean placement on a low tier with a low copayment, which helps drives more patients to take that drug.

In the case of Ma’s telmisartan, Express Scripts confirmed to PBS NewsHour Weekend that the generic drug was designated a “nonpreferred brand,” which put it on the plan’s highest tier with the highest copay.

Joyce said sometimes pharmacy benefit managers try to push customers to take another medication for which it had negotiated a bigger rebate. “It’s financially in their benefit that you take the other drug,” said Joyce. “But that’s of little consolation to the person who just goes to the pharmacy with a prescription that their physician gave them.”

But Joyce said the pharmacy benefit managers also profit when collecting copays that are higher than the cost of the drug.

In recent years, the industry has taken a lot of heat from the media and elected officials over a controversial practice called “clawbacks.” This happens when a pharmacist collects a copay at the cash register that’s higher than the cost of the drug, and the pharmacy benefit manager takes most of the difference.

LINK: https://www.pbs.org/newshour/h...-copay-for-a-40-drug

This is what happens when there are 100 different prices for the same product or service.

My biggest complaint with all things healthcare. What's the price?

Thanks for the post. I will check, we have anthym

I have heard consumers in other countries pay far less for the same drugs than Americans.

I have said for years that my plan to bring health care costs under control is to make health insurance illegal. Cash pay, free market, problem solved.

quote:

Originally posted by honestlou:
I have said for years that my plan to bring health care costs under control is to make health insurance illegal. Cash pay, free market, problem solved.

Might work for out of control college tuition also. As long as colleges can hike tuition and government assistance and student loans pay for it there is no incentive to control costs.

quote:

Originally posted by wcb6092:
I have heard consumers in other countries pay far less for the same drugs than Americans.

Much less

quote:

Originally posted by wcb6092:
I have heard consumers in other countries pay far less for the same drugs than Americans.

I have also heard of Americans going to other countries for medical work. Most common is probably dental work.

When I lived in El Paso, it wasn't unusual for people to go to Juarez for prescription drugs.

quote:

Originally posted by wcb6092:

quote:

Originally posted by honestlou:
I have said for years that my plan to bring health care costs under control is to make health insurance illegal. Cash pay, free market, problem solved.

Might work for out of control college tuition also. As long as colleges can hike tuition and government assistance and student loans pay for it there is no incentive to control costs.

Having something paid for by someone else is the cause of all of this. Screws up incentives something awful.

I check Goodrx every time I get a refill. I don't get all my prescriptions at the same pharmacy because of significant price differences.

The sad part is most of the generic stuff is manufactured in India, China, Mexico, Brazil, etc. Check your prescription bottle. Usually there is a manufacturer listed. Google them. Very eye opening some of the issues some of these companies have in their facilities overseas.

God only knows what type of oversight, regardless of what they say they do, that actually sends these products out the door and into our bodies.

quote:

Originally posted by JALLEN:

quote:

Originally posted by wcb6092:
Might work for out of control college tuition also. As long as colleges can hike tuition and government assistance and student loans pay for it there is no incentive to control costs.

Having something paid for by someone else is the cause of all of this. Screws up incentives something awful.

Not only is there no incentive to control costs, the incentive is to raise them. Although he didn’t anticipate college loans, Henry Hazlitt warned what would happen to prices when the “government” started making money available to people who otherwise couldn’t afford them to purchase other products. That was in 1946, and that and his other predictions have come true in one example after another. It’s the most basic of all economic principles: When people have more money to spend on something, the sellers will raise their prices when the buyers don’t object because the money is essentially free when acquired, and there’s no other reason not to.

I just found this out for myself.
Needed a prescription filled and insurance would not cover it, $88 (at Kroger pharmacy) not a huge deal baby needed the meds so guess what we would pay it. Dr. Called and said they called the local independent pharmacy and they only wanted $27.
Baby is also on a monthly med that runs $60 a month with insurance. I asked this place how much it would be from them, $32.
Also use a steroid/antibiotic ear drop for all 3 boys on occasion. $85 a bottle with insurance and the local place wants $25.
Sure this place is a little bit out of the way but all our prescriptions will be filled there now unless it is an emergency kind of thing and is needed after they closed.

I have a buddy that drives to Canada from Kentucky every 3 months to pickup a 90 supply of his daughters meds because even with time, gas, hotel, it is still way cheaper there.

local investigating reporter covered this topic recently

they can be found at the fox8 New Orleans website along with his latest "licensed to pill" with the opioid stuff

all pretty eye opening

We have no health insurance. I have a direct care physician I pay $160 mo, we can go in as much as needed with no additional copay. I have quarterly bloodwork I have to get that when I had insurance cost between $75 and $125 through insurance, now it costs as little as $2.50 and my doctor tells me all prices up front before running any tests, when I had insurance no one gave a crap and it cost me. My primary care saved me $14mo on my prescription right off the bat and many other supplements and prescriptions she stocks in office are cheaper as well, if not she tells us what pharmacy has the best price. It sucks not having insurance, if something major happens I'm screwed, but just having insurance these days often screws you. Its a good idea to ask the pharmacy how much a prescription costs before putting a script in. I believe if you have insurance on file you have to pay the insurance price. Its amazing to see the cash price difference on some things. I never had issues with medical insurance before the ACA.

quote:

Originally posted by Edmond:

quote:

Originally posted by wcb6092:
I have heard consumers in other countries pay far less for the same drugs than Americans.

I have also heard of Americans going to other countries for medical work. Most common is probably dental work.

When I lived in El Paso, it wasn't unusual for people to go to Juarez for prescription drugs.

I had dental work done in Mexico. My dentist wanted $4,300 . I had the work done in Mexico for $1,200 and it was considered a bit high. So far, it's been 6 years since I had the work done and it's fine.

Anything medical in the states is nothing but robbery.

^^^^^^^^
When I was temporarily working in El Paso many years ago, my 12 year old son had to have some dental work done. Got it across the border for cheap, but he had a mexican accent after, ha.
My main gripe is that I go into grocery store/pharmacy and they have posters set up advertising flu shots for $25 and they give you a $5 store gift card, etc. The store across the street has them for $19.95. And I even got a call last week from them wanting me to make an appointment to come in and get my flu shot. Here's what gives me the monkey red; couple of months ago I get a letter from Medicare showing my charges from last year (flu shot was only one), Pharmacy/grocery store charged and was paid by medicare for almost $100 for the shot. So much $ for the vaccine and about $20 to administer the shot. I could have paid for it myself and saved Medicare a huge amount. My opinion, ripping off Medicare is organized crime.

quote:

Originally posted by cndrdk:
My opinion, ripping off Medicare is organized crime.

Forget baseball. Gaming/abusing government programs is the national pastime.

quote:

Originally posted by PD:

quote:

Originally posted by wcb6092:
I have heard consumers in other countries pay far less for the same drugs than Americans.

Much less

True statement!

Probably 20 years ago my brother in law needed heart medication. He could afford the higher prices but refused. Checked into it and found that by driving from Spokane to Canada he could get the same medication (in some cases same lot number) there for far less than half what he had to pay in Spokane.

Later, he also discovered that he could do the same by going to Mexico. Flew down there, with wife, spent a week, bought his meds, flew home and still saved money.

quote:

Originally posted by PD:

quote:

Originally posted by wcb6092:
I have heard consumers in other countries pay far less for the same drugs than Americans.

Much less

It's becoming more and more common with seniors to go overseas, particularly tagging vacation on top of the medical call.
Here's a couple that went to Malta for dental work.