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Health

Prescription Drugs May
Cost More With Insurance Than Without It

By CHARLES ORNSTEIN and KATIE THOMASDEC.
9, 2017

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Photo

The generic version of
Crestor — rosuvastatin — cost Patrik Swanljung of Anacortes, Wash., about $38
less when he bought it through a website rather than using his health insurance.
Consumers are finding that they can sometimes save money on their drug costs by
not using their insurance. Credit
Evan McGlinn for The New York Times

This
article was written through collaboration between The New York Times and
ProPublica, the independent, nonprofit investigative journalism
organization.

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, Mr. 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, Mr. Swanljung went online and found Blink Health, a start-up,
offering the same drug — generic Crestor — for $45.89.

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It had struck a better deal than
did his insurer, UnitedHealthcare. “It’s completely ridiculous,” said Mr.
Swanljung, 72, who lives in Anacortes, Wash.
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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.
Photo

Mr. Swanljung in his
home. He went online and found a start-up called Blink Health, which sold
generic Crestor at a cheaper price. Credit
Evan McGlinn for The New York Times

Several companies have emerged to capitalize on consumer
anger over the confusing variations in price. The players include not only Blink Health and its better-known
competitor GoodRx, but also veteran
businesses like the benefit manager Express Scripts, which recently helped to start a subsidiary aimed at cash-paying
consumers. Amazon, the online behemoth, is
also said to be considering whether to join the fray.

Last Sunday, CVS Health announced
plans to merge with health insurer Aetna, a move that would 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 Mr. 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 Management Association,
which represents benefit managers.

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A spokesman for UnitedHealthcare,
Mr. Swanljung’s insurer, noted that while Mr. Swanljung got a lower price for
generic Crestor through Blink Health, he also takes four other prescriptions,
for which he got a better deal by using his insurance. (Mr. 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 Mr. 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 spending maximum.

Still, many find that leaving their prescription card at
home is 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, N.J., 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 condition.

Last year, each time she filled her prescription at a CVS,
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.
Photo

Dr. Brad Wainer, who
practices family medicine in Berwyn, Ill., explaining drug price options
available on GoodRx to his patients Mary Circelli, right, and Trina
Circelli. Credit Joshua Lott for The New York
Times

“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 Ms. Thomson’s experience, but said it was 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, Mr. DeAngelis
said it would take them longer to reach it and they might end up spending more
in the long run.

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Prices can also vary widely from
month to month when consumers pay cash, he said.

Drug-discount cards have been around for decades, and
retailers like Walmart have also offered cheap generic drug programs, but both
were mainly used by people without insurance.

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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 to pick up a
greater share of their expenses.

Reporters at ProPublica and The New York Times examined
whether 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 drugs 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.”

Have You Had Difficulty Paying For or Obtaining
Prescriptions?

The New York Times would like to
hear from people about their experiences paying for prescription drugs.

Dr. Brad Wainer, a family-practice doctor in Berwyn, Ill.,
said that 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.

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After a New Orleans television
station, WVUE, reported
last year on this practice, known as a clawback, lawyers across 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
issues 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, Ky.

Mary Furman, a retired medical social worker in Charlotte,
N.C., 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 that her share would be $96.89 if she used her Medicare drug
plan, offered by SilverScript, run by CVS Health.

Then the pharmacy offered her a deal — only $72.25 if she
paid cash, a price the worker said was the same the pharmacy would offer to any
customer. “I was flabbergasted,” said Mrs. Furman, who is 72.

Mrs. Furman took the deal, and afterward, her husband,
Nelson, called SilverScript to report what happened. The representative told Mr.
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 Mrs. Furman’s case CVS,
Mr. Furman said they received a call from the SilverScript president. Mr.
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, and once again, they see huge variation in prices for that drug and
others.

“The prices are all over the map,” Mr. Furman said.

Charles Ornstein is a reporter at
ProPublica.

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A version of this article appears in print on
December 10, 2017, on Page A1 of the New York
edition with the headline: One Way to Slash Drug Prices: Leave Insurance
Card at Home. Order Reprints| Today's Paper|Subscribe

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