An Insurer's "Cheap" Pharmacy Partner? Ha

Years ago, my insurance company offered a small prescription drug benefit on the plan we had as a family — $250 per year with lots of provisos about brand names and such and no co-pays. Over time, the plans changed and even the modest benefit disappeared. However, the insurer partnered with a mail-order pharmacy that, originally, offered significant discounts by using them for 90-day supplies of recurring drugs, and had negotiated deals with retail pharmacies to reduce cost for ones you had to get on the spot.

I knew the discounts weren't great, but some drugs I needed were brand name (Lipitor) and others were very cheap. I didn't price check that often, but I thought I was paying reasonable prices. Lipitor went off-patent, and the generic was much cheaper. I turned to Canada for one drug before it also went off-patent. But then I hit the wall when I had a stent put in recently.

After the diagnosis and intervention for my artery issue, I needed to add four new medications and continue one I'd started a few months ago for what seemed to be gastric issues. Aspirin is cheap. The rest vary. When I was discharged from the hospital, I went to the pharmacy, and they assembled all the meds I needed. One of the pharmacists went over all the drugs with me and said, "We gave you the discharge pricing; your insurance plan has terrible coverage." (I had technically been discharged by a different branch of the same hospital group, but the nearby one I was in didn't have Sunday pharmacy hours.) "You should really check out Costco for refills. It will be much less for many of these."

While still in my hospital room, I had priced one of the drugs, Plavix (an antiplatelet medication that keeps the stent clean): $2,500 a year for the brand name and $1,000 a year for the generic equivalent. I had a little sticker shock. Lynn said, "Don't look up the price of drugs while you are in the hospital recovering from a heart intervention." She was right.

A few days later, I did more research. My insurance company's partner, Express Scripts, offered a price that was always more (except, oddly, for one generic drug) than Costco's prices. Costco is a vast buyer, of course. And Express Scripts is enormous, too, and only handles prescriptions. It's absurd to think that a generally available generic drug should cost 10 times as much from Express Scripts than from Costco. [Update: I originally said one has to be a Costco member for these prices. That's apparently untrue. Not clear on the site.]

The total is $3928 per year for my new drugs and existing ones from Express Scripts and $953 for the identical generic drugs from Costco. (I have a query in to Costco about its Synthroid pricing, too.) I'll be sending a letter to the state insurance commissioner asking about this. The markup is absurd, assuming that Costco isn't losing thousands on my orders.

Is it legitimate for an insurer to refer its subscribers to a pharmacy that has such high prices relative to a legitimate, in-country retailer? It smells, but may be perfectly legal. I would like my insurer to require that its partners provide an up-to-date list of drug pricing databases and offer comparisons among major retailers.

DrugExpress ScriptsQtyPer dayCostco PharmacyQtyPer day
Pantoprazole (Protonix) 40mg$298.4890$3.32$21.7490$0.24
Carvedilol (aka Coreg) 3.125mg (2x/day)$156.24180$1.74$9.99180$0.11
Clopidogrel (aka Plavix) 75mg$197.8990$2.20$28.71100$0.29
Ramipril 2.5mg$130.4690$1.45$23.46100$0.23
Levothyroxine (aka Synthroid) 75mcg$22.1890$0.25$86.43100$0.86
Atorvastatin (aka Lipitor) 40mg (cut in half)$85.5390$0.95$26.4990$0.29
Montelukast (aka Singulair) 10mg$77.7290$0.86$51.9390$0.58
Yearly total$3,927.81$952.61