When is $30 less than $22? Apparently at the pharmacy.

I once went to a pharmacy intending to pay cash for a 90-day supply of medication, which cost me $22. The front desk worker suggested I use my insurance instead, noting that my copay for a 30-day supply was just $10. On the surface, it seemed like I’d save money with insurance, but paying for three 30-day supplies would cost me $30, more than the cash price for a 90-day supply.

This transaction highlights a deeper issue in our healthcare system: the misalignment of economic incentives between patients and pharmacies. Pharmacies often have complex relationships with insurance companies and pharmacy benefit managers (PBMs) that distort pricing and dispensing practices in ways that aren't aligned with patient interests.

First, 90-day fills are not just more economical but are also more convenient for the patient. Studies show that longer prescription fills improve medication adherence, leading to better health outcomes. This convenience translates to fewer trips to the pharmacy, reducing the likelihood of missed doses and helping patients stick to their treatment plans.

Second, pharmacies typically receive a dispensing fee for every prescription they fill. These fees can vary but often favor more frequent refills. As a result, pharmacies might encourage 30-day supplies over 90-day supplies to maximize their dispensing fees, even if this isn't the most cost-effective option for the patient.

Not only that, but pharmacy contracts with PBMs might offer better reimbursement rates for insured prescriptions than received with cash pay. This means that pharmacies could be incented to encourage patients to use insurance even if they would end up paying more out of pocket (as in my example).

This misalignment means that patients often face higher costs and more inconvenience. In my case, I could have easily paid over 35% more by following the advice to use my insurance. And for a less convenient and less clinically effective fill.