Cigna Pharmacy Reimbursement: Fill & Download for Free

Each managed-care company (ie Aetna, Cigna, United, et al) negotiates based on potential volume/sales/revenues for discounted reimbursement rates at each pharmacy/chain.The "discounted price" that you would pay your pharmacist is not much different than the rate an insurance company would have reimbursed him for your prescription.So, in a sense, cash-paying customer become self-insured and pay a lower-negotiated rate.You're asking yourself now, "What benefit is this for companies such as GoodRx who negotiate these rates on my behalf??" The answer is: dispensing fees.For each prescription dispensed using a GoodRx discount, the pharmacist not only takes a cut in price, but also pays GoodRx a kick-back for getting you to come to their pharmacy.

Pharmacy Benefit Managers (PBMs).A lot of people are unaware that their insurance company isn’t the one who directly determines the price they will pay at the pharmacy. And it’s not the pharmacist, or the store director either. It’s the PBM.The PBM, through negotiations between insurance company, drug manufacturer, and pharmacy, create the public list price that patients will pay once they reach the pharmacist. The actual price that was paid for the medication, or whether or not the PBM will receive a rebate, is considered a trade secret. Pharmacies and insurance companies are rather strongly advised not to share the actual price, or the reimbursements.[1][1][1][1]All of the above is clearly available from the PBM Wiki. Patients just don’t know to look it up.PBMs are employed by most insurance plans, there are less than thirty of them in the US, and 3 of those ‘cover’ 180 million insured individuals.[2][2][2][2]Those 3 are CVS Health (Owned by CVS, obviously), ExpressScripts (Owned by Cigna), and Optum (Owned by United Health Group).Now, most people wouldn’t spend enough time in pharmacies to notice this, but 2 (CVS and ExpressScripts) of those 3, have a pretty interesting conflict of interest. They are both owned by an insurance company, and they both have their own pharmacy.Totally convenient, right? My insurance plan, my PBM (that I just learned I had), and my pharmacy are all the same company? That must make those negotiations so quick, easy, and great for the customer!If only.The process of deciding how much you pay goes a little like this. For ease, we’re going to ‘super inflate’ the cost of our imaginary drug “CovidAway”.It starts with a conversation and ends with a conversation:Drug Manufacturer: “Hey, PBM, we’re going to tell the media this is going to cost $3k a tablet. Cool?”PBM: “Yeah, cool, we both know we’re not paying that, right?”DM: “Yeah, we’ll make it official in a few weeks, but how’s $1k a tablet? My cost is $200, but I gotta make back all that research and development money and make a profit within 7 years, otherwise I can’t make a profit.”[3][3][3][3] [4][4][4][4]PBM “Thanks, I like a $1k a tablet, I’ll let you know in a few weeks.”PBM hangs up and immediately calls the Insurance Company. They are very respectful, as the IC is technically their owner in a lot of cases.PBM: “Hey, boss, I just saw the news on CovidAway. I already called my guys and screamed my head off. We talked them down all the way to $1.5k a tablet, 50% down! We’re going to start drawing up the formularies and tiers, and sign the paperwork by next month.”IC: “Fine, whatever, just make me the money I deserve on this.”PBM then draws up everything they need for that, and calls the pharmacy.PBM: “CovidAway is going to cost you $1.25k a tablet, you’re going to tell them the cash price is $2k a tablet, and you’re going to be reimbursed anywhere from $1.26k a tablet to $1.75k a tablet. Depending on what you got my kid for his birthday last year.”RpH: “… Okay. But not because I like it, but because this is the only way to get medication to my patients/stay in business/keep people coming to my grocery store/etc.”PBM then keeps whatever is left over, and collects administrative fees. When all along, the dying human being could have gotten the medication for $200, through a direct contract between pharmacy and drug manufacturer.Insurance companies can and do save lives, prevent bankruptcies, etc.But if you ever see that the cash price isn’t listed on your receipt above what your insurance paid for, just ask the pharmacist what you might pay without insurance. See the numbers change.A lot of money is made on charging a patient's $9.99 copay for a thirty count of generic HCTZ, that the pharmacy would only charge the patient $4.36, but the insurance is telling them something else.Footnotes[1] Pharmacy benefit management - Wikipedia[1] Pharmacy benefit management - Wikipedia[1] Pharmacy benefit management - Wikipedia[1] Pharmacy benefit management - Wikipedia[2] Big pharmacies are dismantling the industry that keeps US drug costs even sort-of under control[2] Big pharmacies are dismantling the industry that keeps US drug costs even sort-of under control[2] Big pharmacies are dismantling the industry that keeps US drug costs even sort-of under control[2] Big pharmacies are dismantling the industry that keeps US drug costs even sort-of under control[3] The Soaring Price of EpiPen[3] The Soaring Price of EpiPen[3] The Soaring Price of EpiPen[3] The Soaring Price of EpiPen[4] Do generic drugs compromise on quality? - Harvard Health[4] Do generic drugs compromise on quality? - Harvard Health[4] Do generic drugs compromise on quality? - Harvard Health[4] Do generic drugs compromise on quality? - Harvard Health

I can't give any details for this specific case; I don't know them, and I couldn't share the proprietary information if I did.But generally speaking, it's less expensive to provide medications as a three month supply by mail than as a one month supply at retail. Also, medication compliance rates are higher when the prescriptions are delivered to the patient's door rather than requiring them to go out and get them filled, leading to better health outcomes. So copay and reimbursement rules in pharmacy benefit plans are structured in a way that encourages the former over the latter when appropriate. It saves money for the company and for the PBM; by making it save money for the beneficiary as well, it incentivizes them to work together to help keep costs controlled for everyone.(Disclaimer: this is based on my personal experience in the PBM industry. I am not answering on behalf of Express Scripts/Cigna.)