Cloak­ing lower prices for drugs fought

Phar­ma­cists can’t steer pa­tients to use cash in­stead of in­sur­ance

The Dallas Morning News - - Nation - Robert Pear, The New York Times

WASH­ING­TON — As con­sumers face rapidly ris­ing drug costs, states across the coun­try are mov­ing to block “gag clauses” that pro­hibit phar­ma­cists from telling cus­tomers that they could save money by pay­ing cash for pre­scrip­tion drugs rather than us­ing their health in­sur­ance.

Many phar­ma­cists have ex­pressed frus­tra­tion about such pro­vi­sions in their con­tracts with the pow­er­ful com­pa­nies that man­age drug ben­e­fits for in­sur­ers and em­ploy­ers. The clauses force the phar­ma­cists to re­main silent as, for ex­am­ple, a con­sumer pays $125 un­der her in­sur­ance plan for an in­fluenza drug that would have cost $100 if pur­chased with cash.

Much of the dif­fer­ence of­ten goes to the drug ben­e­fit man­agers.

Fed­eral and state of­fi­cials say they share the phar­ma­cists’ con­cerns, and they have started tak­ing ac­tion. At least five states have adopted laws to make sure phar­ma­cists can in­form pa­tients about less costly ways to ob­tain their medicines. A dozen oth­ers are con­sid­er­ing leg­is­la­tion to pro­hibit gag clauses, ac­cord­ing to the Na­tional Con­fer­ence of State Leg­is­la­tures.

Sen. Su­san Collins, RMaine, said that af­ter meet­ing re­cently with a group of phar­ma­cists in her state, she was “out­raged” to learn about the gag or­ders.

“I can’t tell you how frus­trated these phar­ma­cists were that they were un­able to give that in­for­ma­tion to their cus­tomers, who they knew were strug­gling to pay a high co­pay,” Collins said.

Alex Azar II, the new sec­re­tary of Health and Hu­man Ser­vices, who was a top ex­ec­u­tive at the drug­maker Eli Lilly for nearly 10 years, echoed that con­cern. “That shouldn’t be hap­pen­ing,” he said.

Phar­macy ben­e­fit man­agers say they hold down costs for con­sumers by ne­go­ti­at­ing prices with drug man­u­fac­tur­ers and re­tail drug­stores, but their prac­tices have come un­der in­tense scru­tiny.

The White House Coun­cil of Eco­nomic Ad­vis­ers said in a re­port this month that large phar­macy ben­e­fit man­agers “ex­er­cise un­due mar­ket power” and gen­er­ate “out­sized prof­its for them­selves.”

Steven Moore, whose fam­ily owns Condo Phar­macy in Platts­burgh, N.Y., said the re­stric­tions on phar­ma­cists’ abil­ity to dis­cuss prices with pa­tients were “in­cred­i­bly frus­trat­ing.”

Moore of­fered this ex­am­ple of how the pric­ing works: A con­sumer fill­ing a pre­scrip­tion for a drug to treat di­a­betes or high blood pres­sure may owe $20 if he uses in­sur­ance cov­er­age. By con­trast, a con­sumer pay­ing cash might have to pay $8 to $15.

Mark Mer­ritt, the pres­i­dent and chief ex­ec­u­tive of the Phar­ma­ceu­ti­cal Care Man­age­ment As­so­ci­a­tion, which rep­re­sents ben­e­fit man­agers, said he agreed that con­sumers should pay the lower amount.

As for the use of gag clauses, he said: “It’s not con­doned by the in­dus­try. We don’t de­fend it. It has oc­curred on rare oc­ca­sions, but it’s an out­lier prac­tice that we op­pose.”

How­ever, Thomas Menighan, the chief ex­ec­u­tive of the Amer­i­can Phar­ma­cists As­so­ci­a­tion, said such clauses were “not an out­lier,” but in­stead a rel­a­tively com­mon prac­tice. Un­der many con­tracts, he said, “the phar­ma­cist can­not vol­un­teer the fact that a medicine is less ex­pen­sive if you pay the cash price and we don’t run it through your health plan.”

A bi­par­ti­san mea­sure that took ef­fect in Con­necti­cut this year pro­hibits the gag clauses.

In North Car­olina, a new law says that phar­ma­cists “shall have the right” to pro­vide in­sured cus­tomers with in­for­ma­tion about their in­sur­ance co-pay­ments and less costly al­ter­na­tives.

A new Ge­or­gia law says that a phar­ma­cist may not be pe­nal­ized for dis­clos­ing such in­for­ma­tion to a cus­tomer. Maine has a sim­i­lar law.

In North Dakota, a new law ex­plic­itly bans gag or­ders.

The lobby for drug ben­e­fit com­pa­nies, the Phar­ma­ceu­ti­cal Care Man­age­ment As­so­ci­a­tion, has sued in fed­eral court to block that law.

Au­dra Mel­ton/The New York Times

At least five states have adopted laws to make sure phar­ma­cists can in­form pa­tients about less costly ways to ob­tain their medicines than through in­sur­ance.

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