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CVS Charges More for Generic Drugs Paid for With Insurance

By zzyzzx   Aug 10, 7:50am   1 link   1,005 views   12 comments   watch (0)   quote      

http://www.nbcnews.com/news/us-news/cvs-charges-more-generic-drugs-paid-insurance-lawsuit-claims-n791156

A California woman is suing CVS, the largest pharmacy chain in America, for allegedly charging more to customers who use insurance to pay for certain generic prescriptions.

The lawsuit, filed on Monday, accuses CVS Health Corporation of participating in a "fraudulent scheme" and claims the plaintiff, Megan Schultz, paid $165.68 for a prescription in July that, had she bought without using insurance, would have only cost $92.

"CVS never told her that paying in cash would allow her to pay 45% less for the drug; instead, CVS remained silent and took her money — knowing full well that no reasonable consumer would make such a choice," the complaint says.

The problem, it alleges, is with co-pays sent back to pharmacy benefit managers, or PBMs — the intermediary between insurance companies and pharmacies who negotiate the prices that insurance companies have to pay the pharmacies. PBMs control which pharmacies are in-network for the insurers, incentivizing CVS to offer them a portion of their sales so they can get more clients.

But consumers picking up prescriptions at their neighborhood CVS are blind to that. The agreements between CVS and the PBMs are based on confidential contracts, meaning the "consumer pays the amount negotiated between the PBM and CVS even if that amount exceeds the price of the drug without insurance," the suit says.

As a result, it continues, CVS can overcharge unknowing costumers by collecting co-pays that exceed the pharmacists' price and then remit the excess payment back to the PBMs in what's known as "clawback" payments.

The particular prescriptions taken by the plaintiff were not identified, but the lawsuit said the "affected drugs" in the alleged scheme included amoxicillin, Viagra, Lexapro, and other commonly prescribed drugs.

The lawsuit seeks class-action status.

CVS denied the allegations, responding in a statement that they "are built on a false premise and are completely without merit."

"Co-pays for prescription medications are determined by a patient’s prescription coverage plan, not by the pharmacy. Pharmacies collect the co-pays that are set by the coverage plans. Our pharmacists work hard to help patients obtain the lowest out-of-pocket cost available for their prescriptions. Also, our PBM CVS Caremark does not engage in the practice of co-pay clawbacks. CVS has not overcharged patients for prescription co-pays, and we will vigorously defend against these baseless allegations," the Woonsocket, Rhode Island-based pharmacy chain said.

The National Association of Chain Drug Stores, of which CVS is a member, declined to comment.

David Balto, a former policy director of the Federal Trade Commission who is now an antitrust lawyer, called the alleged conduct by CVS "egregious" and told NBC News that PBMs are in dire need of federal regulation.

"No market is as thinly regulated as PBMs, and they're increasingly taking advantage of it," he said. "I think it's crystal clear: Letting these entities live in a Wild West regulatory environment just leads to higher costs for consumers."

Lowering drug prices has long been a goal for both political parties. President Trump met with top pharmaceutical executives at the White House in January and urged them to push their costs down, telling them, "We have no choice."

But the particular problem of clawbacks has only recently gotten attention, mostly at the state level. Last month, Connecticut Gov. Dan Malloy signed a bill to stop the practice.

At least 16 other lawsuits have been filed against various drugstore chains accused of engaging in clawback practices, the complaint says.

#CVS #drugs #ripiff

Comments 1-12 of 12     Last »

1   BayArea   Aug 10, 8:01am     ↑ like (4)   ↓ dislike   quote    

Similar problem exists in the automotive industry when insurance is involved.

And they wonder why premiums are off the charts

2   bob2356   Aug 10, 9:11am     ↑ like   ↓ dislike (2)   quote    

Why do people like trump hate the free markets?

3   Tenpoundbass   Aug 10, 9:39am     ↑ like   ↓ dislike   quote    

BayArea says

Similar problem exists in the automotive industry when insurance is involved.

And they wonder why premiums are off the charts

YOu better believe it!

My insurance company told me I had to use Ideal Automotive.

They quoted $8K to fix a wreck. A few grand more the ins would have just totaled out the car.
When the work was done Ideal billed over $11K for the work.
The Ins didn't bat an eye. But that means I got fucked out of a new car. And am driving a wrecked beater that should have been totaled.

4   APOCALYPSEFUCK_is_ADORABLE   Aug 10, 9:45am     ↑ like (5)   ↓ dislike   quote    

This is called INNOVATION!

5   zzyzzx   Aug 10, 9:55am     ↑ like   ↓ dislike   quote    

Tenpoundbass says

And am driving a wrecked beater that should have been totaled.

So, you are wishing that you had kept the money and not gotten the body damage fixed, correct?

6   curious2   Aug 10, 11:25am     ↑ like   ↓ dislike   quote    

zzyzzx says

Lowering drug prices has long been a goal for both political parties.

LOL.

7   Dan8267   Aug 10, 11:28am     ↑ like (1)   ↓ dislike   quote    

This is called fraud and should be treated as a criminal matter.

8   Dan8267   Aug 10, 11:29am     ↑ like   ↓ dislike (3)   quote    

Also, if capitalism is supposed to be so damn good at efficiently allocating resources, why didn't the insurance companies put a stop to this to save money. Another epic fail.

9   curious2   Aug 10, 11:46am     ↑ like (1)   ↓ dislike   quote    

Dan8267 says

This is called fraud and should be treated as a criminal matter.

It isn't even fraud, it's just business enabled by laws written for the purpose of concentrating power (including in the form of revenue) in the hands of the patronage networks that wrote them. It is a logical consequence of a revenue-maximizing system operating as designed.

If reducing drug prices were actually a goal of either major party, it could be achieved by repealing the Rx requirement and opening all off-patent drugs to global competition. That way, similar drugs would compete with each other at the point of sale, and generic manufacturers would compete with the lowest prices in the world. Capitalism can work if markets are allowed to function without the distortions of American medical insurance legislation.

BTW, that is part of how Mexico achieves similar life expectancy to the USA, with 90% lower cost. Mexico has a whole chain of "Similar Pharmacies" that sell similar drugs, not exactly the same but close enough, at low prices. In the absence of Obamneycare cost shifting and obfuscation, competition from similar alternatives has the effect of reducing prices even for brand name drugs. Mexico does theoretically have an Rx requirement, but in practice Mexican pharmacists tend to be flexible about that. Also, Mexico subsidizes medical education for students smart enough to get through, and does not require excessive years of unnecessary and unrelated "education" before going into practice, so the country has a plentiful supply of competent doctors. If you walk into a pharmacy without an Rx, the pharmacy can either skip the Rx requirement or refer you to an onsite doctor who can prescribe whatever you need, for a small fee and in only minutes.

10   Dan8267   Aug 10, 2:46pm     ↑ like   ↓ dislike (1)   quote    

https://www.merriam-webster.com/dictionary/fraud

intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right

Sure sounds like fraud to me. They are tricking the customer into paying twice as much for the drug.

It's also clearly not an efficient economic mechanism.

11   epitaph   Aug 10, 4:10pm     ↑ like (1)   ↓ dislike   quote    

It happens everywhere though and it irrefutably proves that insurance is a scam.

Lots of opportunity still to sue other sectors for doing this...

12   HEY YOU   Aug 10, 5:43pm     ↑ like   ↓ dislike   quote    

Tenpoundbass says

My insurance company told me I had to use Ideal Automotive.

Is it legal for your ins.co. in your state to tell you have to use a particular repair shop?
If it's illegal,someone is a sucker.

Wait TPB never had a wreck. I've been trolled!

Comments 1-12 of 12     Last »

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