Bills would let pharmacists tell customers best prices
Washington — A new package of legislation introduced in Congress would bar legal clauses that limit pharmacists from alerting patients to the cheapest way to pay for their prescriptions at the pharmacy counter.
The bipartisan bills would bar an insurer or pharmacy benefit manager from restricting a pharmacist’s ability to disclose when a customer’s prescription would cost less if they paid the cash price, rather than the amount of their health insurance copay.
The legislation was prompted by the practice of “clawbacks.” That’s when a patient’s copay — often set by the pharmacy benefit manager — is more expensive than the total cost of the drug. The difference in cost is then “clawed back” by the insurer or pharmacy benefit manager.
Pharmacist groups say patients often don’t know they could potentially save money by paying cash —particularly for generic drugs. But pharmacists themselves are sometimes prohibited from volunteering this information by clauses in the contracts with the pharmacy benefit managers who administer prescription drug plans.
“This was just a shock when I found out about this,” said Sen. Debbie Stabenow, D-Lansing, who is sponsoring the legislation with Republican Sen. Susan Collins of Maine.
“This is something that we need to change. It’s a really important consumer protection that needs to be added.”
Stabenow said she learned about the issue from pharmacists who were frustrated they couldn’t help their customers get the best price. At least nine states have adopted legislation meant to eliminate the practice.
Larry Wagenknecht, chief executive of the Michigan Pharmacists Association, said his members encounter the scenario “every day.” He attributes the trend in part to increases in prescription co-payments in recent years and lower cash prices for generic drugs.
“It is a real challenge for pharmacists today, whether they are working in a chain or a small independent — they are struggling day in and day out in dealing with a lot of the rules and regulations of the pharmacy benefit manager that are aligned to benefit the PBM and not necessarily the patient and certainly not the pharmacy,” Wagenknecht said.
The Pharmaceutical Care Management Association, a Washington-based trade group for pharmacy benefit managers, issued a statement in response to Stabenow and Collins’ bills, suggesting that gag clauses are uncommon.
The association said it supports patients “always paying the lowest cost at the pharmacy counter, whether it’s the cash price or the copay,” and said this is “standard industry practice” in both Medicare and the commercial sector.
“We would oppose contracting that prohibits drugstores from sharing with patients the cash price they charge for each drug. These rates are set entirely at the discretion of each pharmacy and can vary significantly from drugstore to drugstore,” the association said.
“Fortunately, to the degree this issue was ever rooted in more than anecdotal information, it has been addressed in the marketplace.”
But a study published last month in the Journal of the American Medical Association by researchers at the University of Southern California’s Schaeffer Center for Health Policy & Economics suggested the practice goes beyond anecdotes or the allegations in consumer lawsuits.
The study, based on pharmacy claims data from 2013, found that customers had overpaid for their prescriptions nearly a quarter (23 percent) of the time, with an average overpayment of $7.69 on the transactions.
The researchers found over-payments were more likely on claims for generic drugs, rather than brand-name drugs.
“Clearly, this is going on (at a) much higher frequency than most people imagine,” Geoffrey Joyce, a co-author of the study, told Kaiser Health News. “You’re penalizing people for having insurance.”
A 2016 survey of 640 pharmacists by the National Community Pharmacists Association found that 59 percent of pharmacists had encountered “gag clause” restrictions at least 10 times in the previous month.
Not all pharmacy benefit managers have gag clauses in their contracts, but Wagenknecht said Optum Rx, for example, makes it clear in its pharmacist manual that it’s considered a breach of contract to discuss pricing with a customer.
Drew Krejci, a spokesman for Optum, said the company does not have gag clauses that prohibit pharmacies from telling customers about a lower cash price.
Stabenow and Collins’ bills — and companion legislation in the House — would bar gag clauses restricting a pharmacist from providing drug price information to a customer when there is a difference between the cost of the drug under the plan and the price when purchased without insurance.
The Patient Right to Know Drug Prices Act would apply to plans offered through private employers or health exchanges, and the Know the Lowest Price Act would apply to individuals covered by Medicare Advantage and Medicare Part D plans, the lawmakers said.
“Insurance is intended to save consumers money,” Collins said in a statement. “Gag clauses in contracts that prohibit pharmacists from telling patients about the best prescription drug prices do the opposite.”
While the legislation is pending, Wagenknecht suggested that Michigan patients ask their pharmacist if the cash price for their drugs would be cheaper than their copay.
Under state law, a pharmacist must provide information if asked, and state law supersedes the contract, he said.