Overcharging for Generics

Maximizing the appropriate use of generic prescription drugs is, without question, the quickest and easiest way to reduce overall drug benefit costs. But much of those savings are forfeited if the PBM middleman is allowed to keep too much.

Some generic drugs are one-fifth of the price of a comparable brand name drug. In these cases, when patients switch to the lower-cost generic, PBMs may pocket a large share of that 80 percent savings, rather than passing it through to the plan and patient. The PBM may retain half of those savings without disclosing them, while boasting to the plan sponsor and patient how much money it saved them, when their savings could be much greater.

This practice is common in both the retail and mail pharmacy settings.