Are You Paying Too Much For Your Prescription? Maybe, But Your Pharmacist Isn’t Allowed To Tell You.
Pharmacy benefit managers (PBMs), which act as intermediaries between pharmaceutical manufacturers, insurers and pharmacies, operate behind the scenes and are little understood by consumers and policymakers. Working in the shadows of the healthcare sector keeps PBMs out of the public eye and enables them to escape their fair share of scrutiny.
We’ve previously written that three PBMs control 78 percent of the market and use “clawbacks” to make huge profits that drive prices up for consumers.
This week, two congressional hearings on drug pricing honed in on another PBM practice that increases the cost of prescription drugs for consumers and federal entitlement programs: contractually mandated “gag” clauses PBMs impose on pharmacists.
Senator Susan Collins (R-ME) explained it succinctly: “The imposition of gag clauses on pharmacists [is] to prevent them from informing patients that they may be better off paying out of pocket than using their insurance.”
She is correct. There are many examples of consumers discovering that they are dramatically overpaying for their prescriptions because a PBM has silenced, through a binding legal contract, a pharmacy from assisting a consumer and informing them that they have better options.
The New York Times recently highlighted an example where a consumer was charged over $80 for their prescription and found that they could purchase the same drug for $45.
The difference: the PBM’s deal with their insurance and their contract with that pharmacy forbid them from sharing the cheaper option with the patient.
In one of this week’s hearing in the House Energy and Commerce Committee, Representative Buddy Carter (GA-1) asked the president of the Pharmaceutical Care Management Association – PBMs’ lobbying association– “if, indeed, as you said earlier, you’re in favor of transparency, why are the gag clauses in there?”
The association’s response? They do not defend gag clauses.
And, yet, they include them in their contracts– perhaps in the majority of contracts between pharmacies and PBMs. A national survey of pharmacists found that approximately 59% reported that they encountered a gag clause at least 10 times in the last month.
And, this isn’t a localized problem affecting certain consumers with specific medications. A study by the Center for Medicine in the Public Interest found that increased spending on pharmaceuticals and the associated rise in the cost of drugs is correlated to and caused by these practices.
As PBMs and insurers profit from these practices, consumers pay more and the cost of entitlement programs skyrocket, eating up valuable taxpayer dollars that could be reinvested or returned to consumers.
Rep. Carter put it best, “The most immediate, the most significant impact that we can have on drug prices, is to have transparency” from PBMs.
PBMs claim they don’t defend the practice of imposing gag orders on pharmacies, but three PBMs control 78 percent of the market; they could easily stop the practice. The truth is, they don’t want to because theymake more money by deceiving American consumers.
Congress should keep pushing PBMs to do the right thing and put an end to pharmacy gag clauses.