Complex Drug Pricing Under Scrutiny as Patients Face Higher Costs

A health policy expert’s year-long effort to secure a 90-day supply of a maintenance medication through CVS Caremark has exposed the complex and often opaque systems that govern prescription drug access and pricing in the United States. The experience highlights how pharmacy benefit managers (PBMs), insurance plans, and third-party vendors can create barriers for patients, sometimes resulting in higher out-of-pocket costs for essential medications.

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The case centers on Chris Jacobs, a policy analyst who chronicled his attempts to obtain a 90-day supply of potassium citrate, a medication prescribed to prevent kidney stones. Despite his physician’s repeated requests, CVS Caremark, acting as the PBM for his insurer CareFirst, would only dispense 30-day supplies. Jacobs’s experience is emblematic of broader concerns about the ways PBMs and insurers interact under federal health care law, with critics arguing that the system’s lack of transparency and profit-driven incentives can leave patients paying more and struggling to access their medications.

After months of denials and inquiries, Jacobs discovered that a third-party vendor, Medispan, played a key role in the decision. Medispan had classified potassium citrate as a non-maintenance drug, which, under CareFirst’s plan rules, triggered a 30-day supply limit. This classification persisted even though Jacobs’s physician had prescribed the drug for long-term, preventive use.

Insurer and PBM Roles

CVS Caremark’s communications team explained that CareFirst is the plan sponsor and that Medispan determines which drugs are considered maintenance medications. Because Medispan listed potassium citrate as non-maintenance, CareFirst’s plan limited the supply to 30 pills. CVS Caremark said that members could seek an exception by having their physician submit clinical justification to CareFirst, but Jacobs said this process was not clearly communicated in the notices he received.

"CareFirst is the plan sponsor, and CVS Caremark helps support the administration of the plan’s pharmacy benefit. This CareFirst plan relies on an expert third-party vendor, Medispan, to determine which medications are considered maintenance drugs versus acute. Because Medispan lists potassium citrate as a non-maintenance drug, it is subject to the CareFirst plan’s non-maintenance day supply limit of 30 pills. Members have access to an exceptions process, which is administered directly by CareFirst."

— CVS Caremark communications team

Jacobs questioned why CVS Caremark’s notices did not specify whether the insurer or PBM made the coverage decision or provide clear instructions for filing an appeal. CVS Caremark did not address these questions directly in its response, leaving patients like Jacobs to navigate a confusing system with little guidance.

The lack of transparency in the process, according to Jacobs, makes it difficult for patients to understand their rights or the reasoning behind coverage decisions. This confusion can lead to delays in care or higher costs, particularly for those who require ongoing medications.

Out-of-Pocket Alternatives

Frustrated by the lack of clarity and the higher costs through his insurance, Jacobs began exploring cash payment options outside his health plan. He found significant price differences depending on where and how he purchased the medication. CVS Caremark charged $45.81 for a 30-day supply, while alternative providers such as Cost Plus Drugs and Pharmacy Checker offered the same medication for as little as $10.93 or $17.27 for a 90-day supply. By using a discount code at a local pharmacy, Jacobs was able to pay less for a 90-day supply than CVS Caremark charged for just 30 days.

CVS Caremark responded that “the same medication can have different member costs depending on the plan and pharmacy selected.” The company emphasized that member costs are determined by the specific insurance plan and the pharmacy used, and that exceptions processes are available for patients who qualify. However, Jacobs argued that PBMs and large health care conglomerates can profit by overcharging for prescriptions, shifting profits from insurance businesses—where federal law caps margins—to pharmacy operations, which are not subject to the same limits.

This price disparity is not unique to Jacobs’s case. Many patients have reported similar experiences, where paying out-of-pocket or using discount programs results in lower costs than going through their insurance. The complexity of the system, combined with a lack of clear information, often leaves patients to do their own research to find the most affordable options.

Policy and Oversight Questions

The scrutiny of PBMs and insurers comes as lawmakers and regulators examine whether these entities are evading medical loss ratio (MLR) requirements under federal health care law. The MLR is designed to ensure that insurers spend a minimum percentage of premium dollars on medical care, rather than administrative costs or profits. However, some policymakers are concerned that PBMs may be structuring transactions to shift profits away from regulated insurance lines and into less-regulated pharmacy operations.

A letter from Sen. Elizabeth Warren and other lawmakers to the Department of Health and Human Services’ Office of Inspector General, cited in The Federalist, raises concerns that PBMs may be undermining consumer protections and driving up costs by exploiting these regulatory gaps. The letter calls for further investigation into whether such practices are harming patients and circumventing the intent of federal law.

Supporters of the current system argue that plan design and pharmacy networks can help control costs and ensure drug safety. CVS Caremark stated that member costs vary by plan and pharmacy, and that exceptions processes are available for patients who qualify. They maintain that these systems are necessary to manage drug utilization and keep overall costs in check.

Nevertheless, Jacobs’s experience underscores the complexity and lack of transparency in prescription drug coverage. Patients are often left to navigate appeals, decipher plan rules, and seek lower-cost alternatives on their own. The case has fueled ongoing debates about the need for greater oversight and reform in the PBM and insurance industries, as policymakers weigh how best to protect consumers and ensure affordable access to medications.

As lawmakers continue to investigate, patients like Jacobs remain caught in the middle, facing a system that can be difficult to understand and even harder to navigate when seeking essential medications.