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I-Team: Drug Middleman Could Be Charging You More Than Your Medicine Costs

ROCKLAND (CBS)- Amy Frostland works hard as a waitress to help support her two young boys. And even though her husband gets health insurance through his job, it still takes a big bite out of their budget.

"Health Insurance is ridiculous," she said.

That is why Amy was stunned when she realized that expensive insurance was not helping her when it comes to paying for her medication.

I-Team Drug Cost
Amy (WBZ-TV)

"If I run my insurance, it's going to cost me $90 for a three month supply; if I do it without insurance, it is $10 for a three month supply," she explained.

"It's a huge problem," said Todd Brown of the Massachusetts Association of Independent Pharmacists.

Brown says much of the blame lies with pharmacy benefit managers, or PMBs. They act as middlemen between insurance companies and pharmacists to process your prescriptions.

They negotiate prices with drug manufacturers and they handle all the patient claims.

Brown said these little known companies are making billions of dollars in profits.

"When you look at the profit these companies make, it's excessive. It's inconsistent with the rest of the health care industry," he explained.

I-Team Drug Cost
Pills (WBZ-TV)

So how are they making that money? Two class actions suits, one of which was filed in Connecticut, claim it is coming from your co-payment.

"It's really more of a "you-pay" than co-pay," said Bob Izard, a Connecticut attorney working on both lawsuits.

Here's an example from one of the lawsuits in which a Massachusetts woman is the lead plaintiff:

An insurance plan requires a $20 co-payment on all prescription drugs. But the price owed to the pharmacy for the medicine is on $1.75. The suit alleges the PMB pockets the change of $18.25, which is called a 'clawback'.

"We describe it as basically a massive fraud," Izzard said.

According to the lawsuits, this is not about high-priced designer drugs.

It involves common, relatively inexpensive drugs millions of people take every day like the antibiotic Azithromycin, the blood pressure medication Lisinopril and cholesterol drugs like the generic form of Lipitor, Atorvastatin.

I-Team Drug Cost
Pills being dispensed. (WBZ-TV)

Patients are largely in the dark about this and the suit alleges the PBMs go to great lengths to make sure it stays that way.

"Pharmacies are prohibited from talking to patients about how much a patient would pay if they just pay cash and didn't go through their insurance," Brown explained.

The I-Team reached out to an industry group, a spokesperson for the Pharmaceutical Care Management Association. They said,"Patients should not have to pay more than a network drugstore's submitted charges to the health plan."

But when we asked them to clarify, the spokesperson never responded.

Amy says she overpaid by hundreds of dollars for years. "I thought it was robbery, absolute robbery," she said.

So how do you avoid overpaying? You can call your pharmacy and ask what the cash price for the drug is.

You can either pay that cash price or call your insurance company and ask why are paying more than the drug costs.

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