Prescription Drugs May Cost More With Insurance Than Without It!

In an era when drug prices have ignited public outrage and insurers are requiring consumers to shoulder more of the costs, people are shocked to discover they can sometimes get better deals than their own insurers. Behind the seemingly simple act of buying a bottle of pills, a host of players — drug companies, pharmacies, insurers and pharmacy benefit managers — are taking a cut of the profits, even as consumers are left to fend for themselves, critics say.

Although there are no nationwide figures to track how often consumers could have gotten a better deal on their own, one industry expert estimated that up to 10 percent of drug transactions involve such situations. If true nationwide, that figure could total as many 400 million prescriptions a year. The system has become so complex that “there’s no chance that a consumer can figure it out without help,” said the expert, Michael Rea, chief executive of Rx Savings Solutions, whose company is paid by employers to help them lower workers’ drug costs.

Pharmacy benefit managers, the companies that deal with drug benefits on behalf of insurers, often do negotiate better prices for consumers, particularly for brand-name medications, Mr. Rea said, but that’s not necessarily true for some generic drugs. Insurers’ clients are frequently employers overseeing large numbers of workers, and the companies are focused on overall costs. So when insurers seek deals for generic drugs, they do so in batches, reaching agreements for groups of different drugs rather than getting the lowest price on every drug.

As a result of these complicated layers of negotiation — which are not made public — different insurers end up paying different prices for individual drugs. Further compounding confusion for consumers, some insurers require a set co-payment for each prescription — say, $15 or $20 — even when the insurer reimburses the pharmacy at a much cheaper rate.

-The New York Times