Should I Use My Pharmacy Benefit or Online Coupons?

High deductible health plans (HDHPs) were created to help plan sponsors contain costs while empowering members to make their own independent, cost-conscious healthcare decisions. Under a HDHP, members are responsible for 100% of the cost of care until they meet a set deductible amount. When the deductible is met, the member cost-share is activated, at which time the employer and members share in the cost of care either via a flat copayment or coinsurance methodology.

Now with the increasingly high cost of medications, plan sponsors are seeing more HDHP covered members using retail store discount and online cost-savings programs at the point of sale instead of their health plan’s pharmacy benefits. However, by using store and online discount programs, the member is choosing not to take advantage of their earned health benefit – one paid in part by the employer and in part by the employee’s monthly premiums. The perceived versus the actual value of these options should be carefully understood and considered before members decide to bypass the value provided by their health plan coverage.

Using online Rx discount programs means choosing not to take advantage of your earned health benefit. Consider these points before deciding. #drugcosts

Michael Berger, MBA

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The Online Discount Model

Online discount programs – such as GoodRx, Blink, and MedTipster, to name a few – function as discount cards used at the point-of-sale to purchase medications as a cash-only transaction, and the member’s insurance card is never used. In this process, claims do not pass through the insurance plan. Online coupons promise a lower price at the pharmacy, but this is not true across the board.

• Discounts Apply to Brand and Generics: Members may discover that there are some brand and generic drugs that can be purchased using the discount cards. However, the majority of the transactions are for generic drugs. Members should always ask the pharmacist to price the prescription using their insurance and their coupon so that they can select the best option.
• Prices Are Estimates: Pricing estimates are not always accurate on these applications. For example, GoodRx states that the prices they show are their “best estimate” and cannot guarantee that the price they display will exactly match the price members receive at the pharmacy. Members are required to show the pharmacy the GoodRx coupon to confirm the discount price.
• Requires Shopping Around: According to consumer reviews, around 40% of the time, the price changes when members get to the pharmacy. To be sure members are getting the best price, they may have to visit multiple pharmacies to find out the actual discounted price for their specific medication. If a member has more than one prescription, it may lead to getting one prescription filled at one retail pharmacy and a second prescription filled at a different retail pharmacy.
• Questionable Access: According to the online websites, participating pharmacies are listed by zip code. However, consumers have reported that their pharmacies listed online won’t even accept the online coupons.
• Potential for Bait and Switch: GoodRx openly states that one of the ways they make money is through a referral fee paid by pharmacies when they send new customers to the store. For the pharmacies, participating in the online discount program serves as a way for them to drive traffic to their store. In fact, many pharmacies would accept a smaller profit margin on the medication just to drive retail front-end sales or increase the probability of a repeat customer.

The Pharmacy Benefit Model

Pharmacy Benefit Managers (PBMs) contract a pricing schedule with each pharmacy for a given drug. The prices paid by the PBM vary by pharmacy, drug strength, and days’ supply. When a member uses their insurance card, regardless of which pharmacy they go to, the transaction is recorded and the PBM adjudicates the claim. All of the member’s deductible files generally are updated in real time, and the member always has visibility into where they are in relation to their deductible and out-of-pocket maximum. When using online coupons, members are not participating in their earned health benefit, provided through the PBM, for a short-term perceived gain.

• Cash May Not Be Counted Toward Deductibles: Most purchases using online coupons do not count toward members’ insurance deductible or out-of-pocket maximums, which are designed to manage the amount of money they spend out-of-pocket before cost-sharing begins. Such unrecorded spending could be a problem for seriously ill patients with high medical costs who would benefit from meeting their deductible and sharing the cost of care.
• Paper Claims: If members pay cash using an online coupon and then submits the paper claim to the PBM for inclusion in their deductible, the claim will process according to the benefit plan design. For example, if the drug requires a prior authorization, it will reject and the deductible file will not be updated. In this case, health and safety checks will not occur. The employer may incur a fee for processing the paper claim.
• Potential Drug Safety Concerns: Online discount programs interfere with the PBM’s ability to perform concurrent drug utilization review. These types of programs help to ensure that drugs are used appropriately, creating a safety net for members and safeguard for the plan’s overall pharmacy costs. When members do not use their insurance card, the PBM does not receive the claims data and cannot review coverage nor manage potential safety concerns such as drug-drug interactions, inconsistent clinical counseling, and reporting on their medication history.
• Neutral Effect on Overall Costs: In some cases, the PBM’s contracted pharmacy price may seem inflated when compared to the online coupon price. In other cases, the contract pricing may be lower than the coupon price. The overall net effect may be neutral. However, from the benefit coverage standpoint, every claim processed through the PBM system will apply to the deductible, pushing the covered member closer to accessing the cost-sharing earned benefit.
• Forfeiture of Drug Rebates to Plan Sponsors: There are no drug manufacturer rebates available when filling brand prescriptions through online discount programs.

The Bottom Line

It’s important for plan sponsors and members to understand what’s really happening when online coupons are used in place of insurance cards. PBMs are held to pricing models based on their contracts with the specific pharmacies in their networks, while store discount and online coupon programs have their own financial incentives that drive their objectives. Online coupon programs may generate a cheaper out-of-pocket price than the insurance plan’s discounted price in some instances. To be sure, members must carefully comparison-shop drug prices at each of their local pharmacies to avoid the risk of paying more than they would under their pharmacy benefit. Members should always ask the pharmacist to price the prescription using their insurance and their coupon so that they can select the best option.

For more on this topic, check out our video, How to Make Rx Drug Manufacturer Incentives Work for Your Clients.