Warning: One Way You Should Almost Never Fill Prescriptions – Technologist

Staying on top of your medications is crucial, but keeping track of their prices is also key.

Money expert Clark Howard warns that filling prescriptions through pharmacy benefit managers (PBMs) may harm your wallet in the long run.

What Are PBMs?

PBMs are typically used by health insurers and employers to manage the prescription drug benefits of employees.

One of the main functions of a PBM is to act as a broker between drug manufacturers and pharmacies and to negotiate discounted rates for medications.

According to the Commonwealth Fund, a private, nonprofit organization that advocates for health care research, “By negotiating with drug manufacturers and pharmacies to control drug spending, PBMs have a significant behind-the-scenes impact in determining total drug costs for insurers, shaping patients’ access to medications, and determining how much pharmacies are paid.”

Clark says a number of top health insurers even own PBMs, which makes the former even more powerful.

“UnitedHealth owns Optum. CVS owns CareMark and Cigna owns Express Scripts,” Clark says. “And these groups have been accused repeatedly of taking kickbacks and charging you more money for prescriptions than the free market price.”

To Clark’s point, a massive study on PBMs from the Federal Trade Commission states that “PBMs and brand pharmaceutical manufacturers sometimes enter agreements to exclude generic drugs and biosimilars from certain formularies in exchange for higher rates from the manufacturer.”

How Do PBMs Make Money?

In addition to administrative fees, PBMs make money by controlling drug pricing and reaping the benefits of this control. 

According to the Pharmacists Society of the State of New York, “They determine how much to bill the insurance plan per prescription and what they will reimburse the pharmacy for dispensing that prescription — the difference between the two prices, often referred to as the spread, is kept by the PBM.”

Why Clark Says You Should Not Automatically Buy Prescriptions Through a PBM

“In my experience, for almost every prescription I take, I can fill my prescription cheaper on my own without insurance than what they cost through the pharmacy benefits manager,” Clark says.

“This is because of the kickbacks that these organizations, supposedly to benefit you, are receiving from the drug manufacturers. And those kickbacks are then made up through the higher prices when you fill them through your supposed prescription benefit,” he adds.

Here’s an Exception: Buying Through PBMs

Clark says buying prescription drugs through a PBM is a no-no, but there’s one exception:

“If you’re having to fill an expensive benefit drug, let’s say it’s not available in generic, or they’re ripping you off on the generic, like what’s happened with insulin, filling it through the employer plan [PBM] will likely be cheaper unless there’s some code or coupon you can get to fill that brand-name drug,” Clark says.

Where To Get Your Prescriptions Cheaper

Warehouse Clubs

 Costco Wholesale, Sam’s Club and BJ’s Wholesale Club all have robust prescription programs that will save you money.

“The cheapest prices are going to be at the warehouse clubs. You can probably add Walmart in there,” Clark says.

Many of these warehouse clubs offer cheap medications. Read our list of pharmacies with $4 prescriptions.

Mark Cuban’s Discount Drug Program

If you didn’t know, billionaire Mark Cuban has an online prescription drug program. The Cost Plus Drug Company routinely undercuts what you’ll pay at many of the chain pharmacies.

It is free and easy to use. Read up on how to save with Mark Cuban’s Cost Plus Drug Company.

“Not only are we lower than other pharmacies, but a lot of times it’s lower than the price of your insurance,” Mark told the Clark Howard Podcast.

Read Clark’s interview with Mark Cuban.

The Independents

There are some smaller players in the game as well, independents like GoodRx, which provide value, Clark says. Another one that I’m using now is the Kroger Health Savings Club, which has a lot of $3 medications.

Here are 10 things to know before you use GoodRx.

Final Thoughts

Clark says PBMs have their place in limited circumstances, but for the vast majority of us, it pays to shop around for low-priced medications.

“You’ll find that if you start price-shopping for the prescription drugs that you fill routinely, you’ll save money, bypassing the supposed employer benefit that ends up being to your detriment when you do not buy drugs independently,” Clark says.

Want more good news for your wallet? Read our guide on how to save on prescriptions.

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