23% of insured patients overpay for generic prescriptions because their copay exceeds the drug's cash price, and most pharmacists still cannot proactively tell them

A patient hands their insurance card to the pharmacist and pays a $15 copay for generic amoxicillin. The actual cash price of that amoxicillin is $4. The PBM keeps the $11 difference through a mechanism called a copay clawback. Research from USC Schaeffer Center found that 23% of commercially insured prescription fills involve a copay that exceeds the drug's total cost to the insurer. Among these overpayment claims, the average overpayment is $7.69. Across the insured population, this adds up to billions of dollars in unnecessary patient spending on drugs that would be cheaper if patients simply paid cash and skipped their insurance entirely. The patient has no way to know this is happening. The pharmacy's computer system shows a copay amount set by the PBM, and the patient assumes their insurance is covering the rest. In reality, the insurance is covering nothing -- the PBM is extracting a surcharge from the patient above the drug's actual cost. Congress banned explicit gag clauses in 2018, meaning PBMs can no longer contractually prohibit pharmacists from telling patients about cheaper cash prices. But the cultural and operational legacy of gag clauses persists. Most pharmacy software systems do not flag when a copay exceeds the cash price. Pharmacists filling 300+ prescriptions per day do not have time to check cash prices against copays for every transaction. And pharmacists who proactively steer patients away from using insurance risk retaliation from PBMs, who track prescription volume and can terminate pharmacies from their networks for pattern deviations. The problem is structural because PBMs profit directly from the spread between what they charge patients (the copay) and what they pay pharmacies (the reimbursement). Eliminating copay clawbacks would eliminate a revenue stream. While federal law now prohibits gag clauses, there is no requirement for PBMs to set copays at or below the cash price, no requirement for pharmacy systems to alert pharmacists to overpayment situations, and no penalty for PBMs that continue to extract clawbacks. The information asymmetry is by design: the PBM knows the cash price, the reimbursement rate, and the copay, but the patient sees only the copay. Texas passed SB 493 in 2025 to further strengthen gag clause prohibitions, but the fundamental economic incentive for PBMs to charge patients more than drugs cost remains untouched.