When paying cash for a prescription is cheaper than using insurance

McClatchy-Tribune Information Services

July 13, 2015

PITTSBURGH ó Charles Conn stopped in to see his pharmacist to fill a prescription for a cough that had persisted for a month. Once he saw how much the medication cost, he could have used a side order of blood pressure pills.

The price, under his insurance plan, was $91 for 30 nonnarcotic Benzonatate gel caps.

"I told him, ĎIím not paying it,í" the Baldwin resident said.

Ninety-one dollars isnít the most expensive prescription medication sold in a pharmacy, but for a retiree on a fixed income, itís not a payout to be taken lightly.

Luckily, the pharmacist had flagged the prescription and was able to sell the medication for $26.10 in cash.

Conn, 66, happily paid the lower price but the episode left him wondering: Why would a prescription cost nearly four times more through his insurance plan than paying cash?

The answer may lie in the vagaries of pharmaceutical pricing, which include the wholesale prices that hardly anyone pays and the largely unseen influence of third-party pharmacy benefit managers.

In Connís case, there was an immediate hurdle he didnít recognize at first: Medicare Part D, the prescription drug coverage for seniors, does not cover cough suppressants and Benzonatate was not in his planís formulary of covered medicines. That meant he could not take advantage of any discount negotiated by his insurer, UPMC for Life.

That still didnít explain why the gel caps cost much more through his insurance.

Tom Tritinger, a pharmacist at Connís pharmacy, said it probably has to do with a price set by the wholesaler that is rarely charged to the patient.

"I canít even tell you what goes into setting that price," he said, adding that usually, the pharmacist "would have managed that down" to a lower price or, absent that, charged a lower price anyway.

"With most pharmacists, the price is a courtesy. There is some compassion," he said.

His advice: Check ahead to see if a new medication is covered under your insurance; ask to speak to a pharmacist if the price seems high; and, if practical, shop around if youíre unhappy with a pharmacyís price.

UPMC for Life literature also suggests checking with its staff to see if a similar drug is covered under its plan when the prescribed drug is not in its formulary.

The insurerís members can request the plan to cover a drug not in its formulary "at a pre-determined cost-sharing level," although such exceptions generally are not granted unless alternative medications would not be as effective or could cause adverse side effects.

Pat Eppel, executive director of the Pennsylvania Pharmacists Association in Harrisburg, said a pharmacy benefit manager ó typically a third party that manages prescription benefits for an insurer ó also may be telling a pharmacy what to charge for a medication.

"No one sees exactly how much the (Medicare) Part D plan is billing the government," she said."A lot of pharmacists believe that the government is paying far more than they need to."

Looking back, Connís wife, Christine, said they are is still "flabbergasted" by the price difference and now wonder if they should ask for the cash price every time.

Tritinger said thatís probably not necessary. "Ninety-nine percent of the time theyíre going to get a better price through the insurance company."