How Do Pharmacies Fill Prescriptions?
When a pharmacy fills your brand drug prescription they’ll typically ask you if they can fill it using the lower cost generic unless your doctor has checked off “dispense as written”. Although your pharmacist may want to save you money filling your prescription with a generic drug, it is important to know that their profit margins tend to be higher on generics.
3 Ways Pharmacies Get Paid when Filling Prescriptions:
- First, you may pay the pharmacy’s cash price. The cash price is the price you would expect to pay if you do not have insurance or you are not using a discount drug card. Unlike insurance or discount cards, no one has pre-negotiated a discount on your behalf. You pay the pharmacies usual and customary price – also known as the U&C price.
- Second, if your medication is covered by your insurance company, the pharmacy needs to send an electronic claim to a pharmacy benefit manager (PBM) for adjudication to calculate your copayment. The PBM has contracted with your insurance company as well as the pharmacy to discount the price of medications. See example below.
- Third, if you are EasyDrugCard, the pharmacy will send the prescription claim to the PBM we use and calculate the discount the same way they do with your insurance card however you pay the full discounted price. Discount drug cards are not insurance so there are no copayments. See example below.
What is a PBM?
Pharmacy benefit managers build pharmacy networks made up of large chains like CVS, Walgreens, Rite Aid, as well as many smaller independent pharmacies.
To build a pharmacy network, the PBM sends out contracts to thousands of pharmacies. The PBM’s contract with these pharmacies and promised to drive traffic into their stores in exchange for negotiated discounts on medications.
The PBM’s also contract with large insurance companies, large employer groups, government entities (like the military), and yes, EasyDrugCard.
The PBM’s clients rely on the PBM to negotiate discounts for their clients so their client’s members are not paying the full cash price at the pharmacy.
An example of how a prescription claim gets processed:
Step 1 – The member walks into the pharmacy with a prescription and their insurance card or their pharmacy benefit card.
Step 2 – The pharmacist enters the information from the card as well as information about the drug including quantity, drug strength, the pharmacy’s usual and customary price (which is the price the pharmacy would normally charge someone without insurance). The pharmacy then sends that claim electronically to the PBM for adjudication.
Step 3 – The PBM is going to look to see if they have a contract with that pharmacy to ensure that it’s part of their network.
If you have insurance
The PBM will then look up to see if this medication covered by the insurance company, check if there a preferred brand drug or generic available, and perform other checks based on the pharmacy benefit that member has with their insurance company.
Assuming the member can get this drug, the PBM looks up the current standard price of that medication and applies the negotiated discount on that drug and calculates the member’s copayment for this prescription claim. That information gets sent back to the pharmacy telling them how much the PBM will pay for that drug and what to collect from that member in the form of a copay.
If you use a discount drug card
The PBM simply looks up the current standard price of that medication and applies the negotiated discount on that drug and calculates the total price for this prescription claim. The member pays the full discounted price. Because no insurance is involved, there are no restrictions (no preferred drug requirements or copay penalties).
Step 4 – The patient receives their medication.
Use EasyDrugCard even if you have insurance! Why?
If your pharmacy benefit with your insurance company has restrictions and penalties, your insurance copay may be higher than the discount card price making you pay more even with insurance.
If you have not met your high insurance deductible you may pay less with EasyDrugCard since your insurance company is not paying any amount towards the total price – you are paying the full price. The pharmacy price with EasyDrugCard may be less.
Get yourself an EasyDrugCard and have the pharmacy tell you how much you’ll pay with the discount card AND with your insurance and choose the lower price!