Pharmacy ‘gag clauses’ blamed in pricing game
Lawmakers on both sides are seeking ways to stop a practice that can keep customers from saving money at the drugstore counter.
Using your insurance plan isn’t always the cheapest way to buy prescription drugs. But your pharmacist might be banned from telling you that.
Lawmakers on both sides of the aisle are seeking ways to stop a practice that can keep customers from saving money at the drugstore counter. “Gag clauses” buried in the fine print of pharmacy contracts — and imposed by pharmacy benefit managers (PBMs) — prevent many pharmacists from telling customers when the cash price for a medicine may be less expensive than their insurance co-pay unless the customers directly ask.
Ending “gag clauses” is just one option as Republicans and Democrats attempt to find ways to lower the skyrocketing cost of prescription drugs — both a problem for the health-care system and a political headache for both parties. President Donald Trump singled out the clauses when he said he wanted to ban them in his May speech on drug prices, a goal also outlined in the administration’s blueprint to lower costs for pharmaceuticals. And congressional legislation has been drafted to tackle the problem.
Health and Human Services Secretary Alex Azar decried gag clauses as “unacceptable” in a hearing last week before the Senate Finance Committee. Last month, he vowed to work with Sen. Susan Collins, R-Maine — who is sponsoring one of the anti-gag clause bills along with bipartisan colleagues — to pass such measures.
During a Senate Health, Education, Labor and Pensions Committee hearing June 12, Collins described standing behind a couple at the pharmacy who said they couldn’t afford a $111 co-pay for a medication. The pharmacist told Collins that happens “every single day.”
“That really troubles me,” Collins said.
“We will look forward to working with you and other senators on legislation that would across the spectrum deal with the issue of these gag clauses and getting it to stop,” Azar responded. “Because we think patients have the right to know what their out-of-pockets are and what their lower-cost alternatives are.”
Pharmacy benefit managers (PBMs) are the middleman acting as a negotiator between drug companies and insurance companies to determine what prescriptions are covered by a given health plan. And experts explained to The Health 202 that it’s the PBM that determines what individuals from an insurance network pay for a drug, and which pocket any difference between costs to pharmacies and patients.
For their part, top PBMs insist they do not include “gag clauses” in their contracts — which tend to contain broad confidentiality rules rather than a single, specific prohibition on sharing the true cost of a drug at the pharmacy counter.
“We do not engage in this anti-consumer practice and are working constructively with state and federal policymakers to ban the practice,” Phil Blando, a spokesman for Express Scripts, told The Health 202 in a statement.