USC Study Explores the ‘Copay Clawback’ Phenomenon

A new study by faculty at the USC School of Pharmacy and the USC Schaeffer Center for Health Policy & Economics, “Overpaying for Prescription Drugs: The Copay Clawback Phenomenon,” explores the frequency and magnitude of co-payments exceeding prescription drug costs.

The study, released today in JAMA, analyzed the prices that 1.6 million people paid for 9.5 million prescriptions in the first half of 2013, based on data from Optum Clinformatics, an organization that sells anonymized claims data for analysis, compared with National Average Retail Price (NARP) data, which contained drug prices paid by insurers and was based on a national survey of pharmacists. It found that pharmacy customers would be better off paying cash 23 percent of the time and would save an average of $7.69 by using cash for those transactions, rather than insurance.

Prescription drug overpayments (also known as “clawbacks”) occur when commercially insured patients’ co-payments exceed the total cost of the drug to their insurer or pharmacy benefit manager.

“Clearly this is going on [at a] much higher frequency than most people imagine,” USC School of Pharmacy Professor Geoffrey Joyce, a co-author on the study, told Kaiser Health News. “You’re penalizing people for having insurance.”

Download the full white paper here (PDF) | JAMA Research Letter: Frequency and Magnitude of Co-Payments Exceeding Prescription Drug Costs

Read more in Kaiser Health News