Recently I learned that I could get a necessary prescription medication cheaper if I didn't use my insurance. I was happy – no more yearly forms to fill out, appeals to make, alternative drugs to try. And then it dawned on me – I still had to pay my premium, but the insurance company didn't have to pay for my medication. Here is how it works for me. If I get my prescription through my coverage at OptumRx, my cost is $50 per month, and that includes a detailed and lengthy approval process required by a nameless corporate entity who doesn't know me and whose concern is company profit. If I don't use the coverage, and purchase my prescription at a local pharmacy with an on-line discount coupon, my cost is $35 per month, no approval needed except by my trusted nurse practitioner Brenda Powell Allen.
So I did what I do best – research to find answers.
Since I worked in the private sector, I qualify for Medicare and pay Medicare premiums. Since I also worked for the State of Illinois, I am covered by a Medicare Advantage Plan, which is administered by United HealthCare, a private corporation. The federal and state governments pay a monthly fee to United HealthCare to cover my hospital and other medical expenses. Optum Rx, owned by United HealthCare, manages the prescription part of insurance coverage and is a mail order pharmacy. And then there are the companies who offer on-line discount coupons for prescriptions.
OptumRx is a pharmacy benefits manager. I’d heard the names of the biggest of these pharmacy benefits managers – Express Scripts, CVS Caremark and OptumRx – and not really known what they were. Estimates vary, but these three companies process around 75% of all prescription claims for 180 million people with gross profits of $23 billion. [i]
Pharmacy benefit managers decide which drugs are covered by insurance and the price of those drugs. They also negotiate discounts and rebates with drug manufacturers, decide how much pharmacies get paid, and join in partnerships with the companies who offer on-line discount coupons.
They are the link between patients, pharmacies, insurance companies and drug manufacturers. Their original purpose was to keep drug prices low. They could use the fact that they represented lots of patients to negotiate lower reimbursement rates with pharmacies, and discounts with drug-makers. And they were supposed to pass those savings back to their health plan sponsors, and thus, ultimately, to patients. It seems to me that their interest is now in profits instead of patients.
In the 1990’s, many of these companies were bought by drug makers, pharmacies and insurance companies. Those big three companies I mentioned? Express Scripts is owned by Cigna, CVS CareMark is owned by CVS and OptumRx is owned by United HealthCare. They are no longer independent.
So, if CVS Caremark is owned by CVS, does it give a better deal to CVS than to other pharmacies?
Why does OptumRx, a mail order pharmacy, who is being paid to cover my prescriptions, make me pay more than if I use a discount coupon at a local pharmacy?
Does OptumRx make more money paying for my prescriptions or not paying for my prescriptions?
After a week’s worth of research, including help from a friend, I cannot find the answers. They could be found in the system of rebates and discounts flowing between drug makers, pharmacy benefits managers, their owners and discount coupon companies. The problem could be caused by the inconsistency of setting drug prices, or the lack of public knowledge of these private, profit-making corporations. Or it just could be that the well-being of individual patients is not as important as profits.
What I know is that I’m not the only one with this particular problem. There are millions of people who are being overcharged for prescriptions.[ii] There are people who try to ration their medications or do without them. This system of ours is broken, and we all need to join the effort to fix it.
I’m hoping you are asking how to help, because you can. The next time you fill a prescription, ask the pharmacist if it would cost less without insurance. You must ask, because most pharmacists are not allowed to volunteer the information because of gag rules imposed by insurance companies or pharmacy benefits managers. Shop around – even pharmacies in the same town use different prices because of their contracts with pharmacy benefits managers. Try an on-line discount coupon. There are lots available.
But most of all, demand that your elected officials do the hard work necessary to fix this mess. We deserve better.
Gayle Carper is a member of the Macomb City council and she’s a retired attorney and retired Professor of Law at Western Illinois University.
The opinions expressed are not necessarily those of the University or Tri States Public Radio.
Diverse viewpoints are welcome and encouraged.