Mail-order pharmacies add much bigger markups: Washington state groups
For brand-name drugs, the average margin gap may be more than $65 per 30-day prescription.
Pharmacy benefit managers imply that buying drugs from their mail-order pharmacies is cheaper than buying the drugs from brick-and-mortar pharmacies, but the mail-order pharmacies tend to be much more expensive, according to a new study backed by two Washington state groups.
Researchers found that mail-order pharmacies charged Washington state patients an average markup of $71.24 over the “national average drug acquisition cost,” or NADAC, for the equivalent of a 30-day prescription of an ordinary brand-name drug.
That compares with an average markup of $17.71 at a big chain pharmacy, $10.50 at an in-supermarket pharmacy and $3.25 at a small, independent pharmacy.
For generic drugs, the average markup was $32.69 at a mail-order pharmacy, $15.65 at a chain store pharmacy, $15.13 at a supermarket pharmacy and $18.69 at an independent pharmacy.
The price gaps persist because the drug pricing process “remains enshrouded in secrecy, hindering comprehensive and transparent evaluation,” the researchers write.
The study was sponsored by Washington State Pharmacy Association, a group for independent pharmacies, and the Washington Health Alliance, a group for about 150 health plans, health care purchasers and health care provider organizations.
The research was a result of pharmacies’ and employer plans’ response to what they believe to be problems with understanding what value PBMs are providing.
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The groups hired 3 Axis Advisors to conduct the study.
The researchers came up with their numbers by looking at prescription claims paid from 2020 through 2023. The analysis included 6.1 million claims from independent and small chain pharmacies and 3 million claims from employer-sponsored health plans in Washington state.
About 2.3 million of the claim records provided by independent and small chain pharmacies were paid by commercial health plans. Most of the rest were paid by Medicare, Medicaid, discount cards and the patients’ own cash.