Rx cash price may be cheaper than your co-pay; just ask your pharmacist

In a study described in the March 2018 issue of JAMA, researchers analyzed around 9 million randomly selected insurance claims for commonly prescribed drugs. They compared patient co-pay amounts with what the likely price would have been if the patient had paid out-of-pocket. In over one-fourth of the claims for generic drugs, patients paid more than the cash price. With brand name drugs, patients were less likely to pay too much since the out-of-pocket cash price exceeded the co-pay only about six percent of the time. But the amount of the over-payments for brand names was larger: on average, about $13.46 per claim, compared with an average over-payment of $7.69 for generics.

Some states (such as Florida and Ohio) have already passed legislation banning the so-called "gag order," a situation where pharmacy benefit managers (PBMs) prohibit pharmacists from telling patients if the cash price for a drug is cheaper than an insurance co-pay. Historically, if pharmacists violated this gag order, then the pharmacy might lose its contract with the PBM. Now, patients in all states will benefit from more transparency in drug pricing. On October 10, President Trump signed into law the Patient Right to Know Drug Prices Act, S.2554 and the Know the Lowest Price Act, S.2553.

Consumers should know that for states that don't already have a ban on the gag clause, the new law might not take effect until as late as 2020. In addition, the pharmacist might not automatically tell you that it is cheaper to pay out-of-pocket; you will need to ask about the price. Also, when you pay out-of-pocket for your prescription, the expense might not apply to your deductible. However, if you have a health savings account, those funds can still be used to pay for your prescriptions.

Here is a list of some of the generic drugs that the JAMA study looked at, along with the percentage of claims in which patients paid more than the cash price: