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CBS 58 Investigates: The question you need to ask to save on your prescriptions

MILWAUKEE (CBS 58) -- Many people assume if they use insurance and get generic medications, they will get the best price on their prescriptions, but that’s not always the case.

“The idea of getting insurance is usually so that you can pay less for your prescriptions,” said Dr. Hashim Zaibak, a pharmacist, and owner of Hayat Pharmacies.

But did you know, that’s not always the case? Sometimes you pay more using your insurance because of what's called a "copay clawback."

Here's how it works: There is a middleman working between the pharmacy and insurance companies called a pharmacy benefit manager, or PBM. It’s that PBM that determines what the patient pays.

“The pharmacies have absolutely no control over the copay,” Dr. Zaibak said.

Sometimes that copay is more than what the medication would cost if you didn’t use insurance and just paid for it yourself. The extra money is the clawback collected by the PBM.

Even when it is cheaper to pay out of pocket, pharmacists aren’t allowed to tell patients about the less expensive option because some contracts between pharmacies and PBMs include gag clauses.

“If we proactively tell the customer, and the PBMs know about it, they can cancel our contract and that can cause catastrophic effect, it can have very bad effects on our pharmacy,” Dr. Zaibak said.

According to Doug Houy, CEO of the National Community Pharmacist Association, there are three PBMs that control 80 percent of the prescription drug market.

“The leverage that PBMs have over pharmacy's and even chains is enormous,” Houy said. “Even like a Walgreens, they've objected to these contracts before to PBM contracts and they wound up caving in.”

The clawbacks typically, but not always, happen with generic drugs and high deductible plans.

Dr. Zaibak ran the data at one of his pharmacies and found so far this year, the copay clawbacks happened at least 327 times on medications for things like dementia, depression and high blood pressure. Sometimes the clawbacks are small, other times they are more significant.

In one case, Dr. Zaibak found an antibiotic, Cephalexin, would cost $5.66 for someone paying cash, but Hayat Pharmacy had to charge a copay of $30.80. The PBM pocketed $25.14. In another case, a blood pressure medication, Carvedilol, would have cost the patient $20.50 without insurance, but the copay for was $50.50. The PBM clawed back $30.

“It has negative impacts most importantly on the patient because sometimes they would have to skip medications because they can't afford all of them,” Dr. Zaibak said.

CBS 58 called dozens of pharmacies, but Dr. Zaibak is one of the few pharmacists willing to talk about this issue publicly.

“What's happened in the past, people have talked, pharmacies have talked and all of sudden they're terminated from the network,” Houy said. “So they may have lost 20 or 30 percent of their business overnight.”

So what can you do to make sure you're getting the best price? Simply ask, “How much it will cost if I don't use my insurance?” Then the pharmacist is free from that "gag clause" and can tell you what the options are.

“It's a good idea just to ask up front, especially if you start a new medication, an antibiotic, a new blood pressure medication you've never had before,” Dr. Zaibak said. “Ask that question, and at that point, the pharmacist will be able to freely tell you what the retail price is for that medication.”

Not all PBMs collect clawbacks, but many that do, are facing lawsuits. And growing concern over the clawbacks is sparking new legislation in some parts of the country.

“Some states are passing laws that say you can't do that,” Houy said. “You can't charge the consumer more.”

Wisconsin doesn't have any laws banning the practice. Dr. Zaibak wants that to change.

“I hope that we will have them soon,” Dr. Zaibak said. “Because I feel that this is not helping the customers, consumers, patients and it's not helping the pharmacists.”

Another recommendation from experts is to talk to your company’s HR department and ask them to look into your prescription drug plan.

CBS 58 reached out to several PBMs, two responded.

CVS Caremark said in a statement, “Our PBM, CVS Caremark’s long-standing practice is not to engage in copay clawbacks, and we have no plans to implement clawbacks. If a plan member’s copay for a drug is greater than the dispensing pharmacy’s contracted rate, it is not CVS Caremark’s practice to collect that difference from the pharmacy. If the pharmacy’s cash price is lower than the co-pay, the patient would be charged the lower price.”

Express Scripts also responded, saying, ““Express Scripts does not engage in the practice of copay clawbacks.” Express Scripts also says it does not prohibit pharmacists from telling patients when the copay is more expensive than the medication.

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