Some drug co-pays higher than cash price, USC study finds

If you have prescription drug coverage, you may have never thought to ask the pharmacist what you'd pay without insurance.

According to a new study by USC, your co-pay could be more for some generics.

Geoffrey Joyce, Director of Health Policy for the USC Schaeffer Center for Health Policy & Economics, and his colleagues looked at data from The Center for Medicare and Medicaid Services in 2013, when pharmacists had to report what they were being reimbursed for prescription drugs.

"Almost a quarter of the time, the co-pay that the member paid exceeded the cost of the drug to the health plan," said Joyce.

He says consumers overpaid by $25 million a month during a six-month period. That money went to the PBMs, the pharmacy benefit managers such as Express scripts, CVS Caremark, OptumRx, who manage drug benefits for most private employers. It's what's known as a "claw back."

"They have contracts with the pharmacies to collect the members' co-pay, even if that co-pay exceeds the reimbursed price of the drug."

For example, if you pay a $10 co-pay and your PBM reimburses the pharmacy for the cost of a generic drug plus a dispensing fee, say $6, the PBM gets to pocket the extra $4 you paid.

Clawbacks are legal, except in federal programs, such as Medicare Part D. If a generic drug is $7 that's what the pharmacy collects, not a $10 co-pay.

"What's been challenged recently in court is what's called a gag clause, where the pharmacist is not allowed to inform the consumer they would be better off without their insurance."

Joyce says consumers should shop around because drug prices can vary from one pharmacy to another.