Why Is My Prescription More Expensive With Insurance?

Depending on your insurance provider, your prescriptions may or may not be covered. Most Americans have insurance that offers coverage on prescription drugs, but not all medications are covered. Health insurance plans are structured differently, but if your pharmacy collects a copay with your prescription, you may end up paying more for the drug than you would have out-of-pocket because of a concept called “clawback.” 

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Why Is My Prescription More Expensive With Insurance?

Every health insurance plan has its policy when it comes to prescription coverage. The breakdown of costs associated with prescription drugs may vary by plan. Depending on your plan structure, you may pay more for your medication if your plan requires you to pay a set copayment to the pharmacy for your medication. Regardless of the cost of your medication, you would be responsible for this copayment, but sometimes your copay could be more costly than the medication itself. This concept is known as a “clawback.”

A copayment on prescriptions assumes that the insurer and the patients share the costs of the drug. Alternatively, when a copayment exceeds the cost of the medication itself, the prescription benefit manager (PBM) keeps the difference as a profit. A study from 2013 found that prescription overpayments amounted to $135 million. In 2019, a series of prescription drug pricing transparency were approved, known as the PBM Transparency in Prescription Drugs Cost Act.