By Charles Ornstein, ProPublica,
and Katie Thomas, The
This story was co-published with The New York Times.
(WASHINGTON, D.C.) -- Having health insurance is supposed to
save you money on your prescriptions. But increasingly, consumers are
finding that isn't the case.
Patrik Swanljung found this out when he went to fill a
prescription for a generic cholesterol drug. In May, Swanljung handed
his Medicare prescription card to the pharmacist at his local
Walgreens and was told that he owed $83.94 for a three-month supply.
Alarmed at that price, Swanljung went online and found Blink
Health, a start-up, offering the same drug — generic Crestor —
It had struck a better deal than did his insurer,
UnitedHealthcare. "It's completely ridiculous," said
Swanljung, 72, who lives in Anacortes, Washington.
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
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
as 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
whose company is paid by employers to help them lower workers' drug
Pharmacy benefit managers, the companies that deal with drug
benefits on behalf of insurers, often negotiate better prices for
consumers, particularly for brand-name medications, 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
As a result of these complicated layers of negotiation, which
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.
Several companies have emerged to capitalize on consumer anger
over the confusing variations in price. The players include not only
better-known competitor GoodRx,
but also veteran businesses like the benefit manager Express Scripts,
which recently helped to start
subsidiary aimed at cash-paying consumers. Amazon, the online
also said to be considering whether to join the fray.
Last Sunday, CVS Health announced
plans to merge with health insurer Aetna, a move
create a corporate behemoth that many have said would have little
incentive to serve the needs of regular people. Some consumers say
their experience with CVS already demonstrates how easy it is to fall
through the cracks. In one case, a customer whose plan was managed by
CVS Caremark, the drug benefit manager, would have had to pay more
for a drug through her plan at a CVS than what she ended up paying at
the same store, with a coupon from GoodRx.
Representatives for insurers and pharmacy benefit managers say
cases like Swanljung's are "outliers." "There are
three to four billion generic scripts written a year, and in the vast
majority of cases, they are going to get a better deal by using
insurance," said Mark
Merritt, chief executive of the Pharmaceutical Care
Association, which represents benefit managers.
A spokesman for UnitedHealthcare, Swanljung's insurer, noted
while Swanljung got a lower price for generic Crestor by using Blink
Health, he also takes four other prescriptions, for which he got a
better deal through his insurance. (Swanljung gave UnitedHealthcare
permission to discuss his situation.) Having insurance is clearly
valuable, said the spokesman, Matt Burns. In addition, the co-payment
for generic Crestor, also called rosuvastatin, in Swanljung's plan is
set to decrease significantly in January, in large part because the
price of the drug has dropped this year.
Consumers also may face penalties if they don't use their
insurance and pay cash to save money. In many cases, insurers won't
let them apply those purchases to a deductible or out-of-pocket
Still, many find that leaving their prescription card at home
worth it. Some have found a better deal even at pharmacies that are
owned by their drug plan, like CVS.
Susan Thomson, 55, a university lecturer who lives in Summit,
Jersey, is covered by a high-deductible plan through her former
employer. Her drug benefits are managed by CVS Caremark, a subsidiary
of CVS Health. For at least a decade, she's been using a prescription
lotion called sulfacetamide sodium to treat rosacea, a skin
Last year, each time she filled her prescription at a CVS
pharmacy, she paid $75.07. Checking the CVS Caremark website this
year, she learned that the cost had gone up to $99.03 (or $81.51 if
she used CVS's mail order service).
Investigating further, she found that GoodRx offered the same
prescription at the same drugstore for $75.57, without her insurance.
The prices were even lower at other pharmacies.
"It just doesn't seem right," she said. "I just
feel that the pharmaceutical industry and health care industry are
pulling these numbers out of thin air."
Michael DeAngelis, a spokesman for CVS, did not dispute the
details of Thomson's experience, but said it is rare and attributed
the price disparity to her high-deductible plan. Because consumers
are responsible for their costs in those plans until they hit their
deductible, DeAngelis said it would take them longer to reach it and
they might end up spending more in the long run.
Prices can also vary widely from month to month when consumers
cash, he said.
Drug-discount cards have been around for decades, and
like Walmart have also offered cheap generic drug programs, but both
were mainly used by people without insurance.
That is changing. Even as more Americans have health insurance
since the Affordable Care Act was passed, insurers are increasingly
asking consumers to pay a larger share of their costs. In 2016, about
five million people in Medicare hit a stage in which they had
pick up a greater share of their expenses.
Reporters at ProPublica and The New York Times examined
they could get better prices on 100 of the most prescribed drugs,
identified by GoodRx, without using their insurance. ProPublica's
prescription claims are managed by OptumRx, a large pharmacy benefit
manager owned by UnitedHealth Group; The Times's medication coverage
for reporters is managed by Express Scripts.
Both reporters found lower prices on GoodRx for at least 40
on the list (many were drugs that can be purchased for $4 at Walmart,
without any coupon).
Blink Health also sometimes beat the insurance out-of-pocket
costs, but less often than GoodRx. Blink Health recently suffered a
series of setbacks when two of the largest drugstore chains, CVS and
Walgreens, stopped accepting its discounts, along with a grocery
chain, Publix. In November, Blink Health sued its pharmacy benefit
manager, which negotiates its prices, claiming that the company,
MedImpact, had violated their agreement. MedImpact has not yet
formally responded to the allegations in federal court in New York.
GoodRx, a private company founded in 2010, displays
the deals it has with nine pharmacy benefit managers, each
offering different prices for different drugs.
"We said, let's see if we can gather all these prices and see
if we can exploit the variation in these contracts," said Doug
Hirsch, GoodRx's co-founder and co-chief executive, "to see if
we can provide better value."
Dr. Brad Wainer, a family-practice doctor in Berwyn, Illinois,
said he frequently shows patients their options on GoodRx to see if
they can get a better price. "Most of them don't believe me
until they go and they find it out for themselves," he said.
Consumers may also pay more if they are covered by plans that
require them to pay a set co-payment, no matter the cash price. In
some of those cases, the insurers require the pharmacies to send them
the difference between what they collect from the consumer and what
the insurers have agreed to reimburse the pharmacies.
After a New Orleans television station, WVUE, reported
last year on this practice, known as a clawback, lawyers
the country filed
lawsuits accusing the insurers — including Cigna, Humana and
UnitedHealthcare — of overcharging consumers. The companies are
contesting the suits.
Several independent pharmacists said there might be safety
if consumers buy drugs at different pharmacies. If those
prescriptions are filled without an insurance card, pharmacy systems
may not catch dangerous drug interactions. "That, to me, is a
recipe for disaster," said Craig Seither, who owns Fort Thomas
Drug Center in Fort Thomas, Kentucky.
Mary Furman, a retired medical social worker in Charlotte,
Carolina, takes the drug celecoxib, the generic version of Celebrex,
to treat her rheumatoid arthritis. When she went to fill a 90-day
prescription in April, her pharmacy told her she would owe $96.89 if
she used her Medicare plan, offered by SilverScript, run by CVS
Then the pharmacy offered her a deal — $72.25 if she paid
a price the worker said was the same the pharmacy would offer any
customer. "I was flabbergasted," said Furman, who is 72.
Furman took the deal, and afterward, her husband, Nelson,
SilverScript to report what happened. The representative told Nelson
Furman he was "not surprised."
The couple then reported the experience to a company hired by
Medicare to investigate fraud, but a representative encouraged her to
contact the health plan again.
After reporters sent details of Furman's case to CVS, Nelson
Furman said they received a call from the SilverScript president.
DeAngelis, the CVS spokesman, blamed the pharmacy for charging the
couple more than what their share should have been using their
insurance. (Medicare rules require that consumers always get the
lower price of their set co-payment and a pharmacy's cash price.)
Now the Furmans are looking at drug coverage for next year,
once again, they see huge variation in prices for that drug and
"The prices are all over the map," Nelson Furman said.
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originally ran at ProPublica and is reprinted here with permission.
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