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Senators aim to quash pharmacy gag clauses

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Bills would let pharmacists share insurance vs. cash Rx costs

WASHINGTON — A group of senators are sponsoring legislation to bring more prescription drug pricing transparency to the pharmacy counter.

Sens. Susan Collins (R., Maine), Claire McCaskill (D., Mo.) and Debbie Stabenow (D., Mich.) yesterday introduced the Patient Right to Know Drug Prices Act (S. 2554) and the Know the Lowest Price Act (S. 2553), which would prohibit so-called “pharmacy gag clauses” that cause many consumers to needlessly overpay for their prescriptions.

Pharmacy gag clauses prevent pharmacists from telling consumers if their prescription would cost less if they paid for it out of pocket instead of through their insurance plan. Pharmacists who violate these clauses face significant penalties, the senators noted.

If passed by Congress, the Patient Right to Know Drug Prices Act would bar insurers and pharmacy benefit managers from restricting pharmacies from informing plan enrollees when the costs differ for a drug covered under a benefit plan versus purchasing the same medication without insurance. The bill would apply to plans offeredby private employers and through health insurance exchanges.

“Insurance is intended to save consumers money. Gag clauses in contracts that prohibit pharmacists from telling patients about the best prescription drug prices do the opposite,” Collins said in a statement.

“Multiple reports have exposed how this egregious practice has harmed consumers, such as one customer who used his insurance to pay $129 for a drug when he could have paid $18 out of pocket,” she explained. “Americans have the right to know which payment method — insurance or cash — would provide the most savings when purchasing prescription drugs. By prohibiting gag clauses, our legislation would take concrete action to lower the cost of prescription drugs, saving consumers money.”

Susan Collins_Claire McCaskill

Sens. Susan Collins (R., Maine) and Claire McCaskill (D., Mo.)

The Know the Lowest Price Act would provide the same prescription drug pricing protection for people covered by Medicare Advantage and Medicare Part D plans.

“Your pharmacist should be able to tell you if there’s a cheaper way to get the prescription drugs you need. It’s outrageous that current practice prevents that, and our bipartisan bill would change it,” according to McCaskill.  “With prescription drug costs rising, Missourians should have access to transparent pricing information so they can make an informed decision that’s best for their families.”

Also introducing the Patient Right to Know Drug Prices Act with Collins, McCaskill and Stabenow were Sens. John Barrasso (R., Wyo.) and Bill Cassidy (R., La.). Sen. Ron Wyden (D., Ore.) also joined the senators in introducing the Know the Lowest Price Act.

“It’s outrageous that companies can stop pharmacists from telling customers how to pay less for their prescriptions,” Stabenow commented. “Customers have the right to know the lowest price available to them at the pharmacy. There is still a lot of work to be done to lower the cost of prescription drugs, but our legislation is an important step forward.”

Later on Thursday, pharmacy organizations voiced their support for S. 2554 and S. 2553 in making prescription drugs more affordable by giving consumers more transparent pricing information.

CVS Health noted that the bills will help consumers make informed decisions about drug costs at the pharmacy counter.

“CVS Health’s own pharmacy benefit manager, CVS Caremark, does not engage in the practice of preventing pharmacists from informing patients of the cash price of a prescription drug, known as ‘gag clauses.’ Actually, our contracts with all dispensing pharmacies in our network require that CVS Caremark members always get the benefit of at least the lower of the pharmacy’s cash price and the plan’s co-pay,” CVS said in a statement. “If a CVS Caremark plan member’s co-pay for a drug is greater than the dispensing pharmacy’s contracted rate, it is not our practice to collect that difference from the pharmacy. We are pleased to see these bills align the industry to these consumer best practices and applaud Sens. Collins, Stabenow, Wyden, McCaskill, Barrasso and Cassidy for their leadership.”

According to the American Pharmacists Association (APhA), the legislation reflects feedback from pharmacists who cited patients’ struggles with high co-payments for their scripts.

“APhA believes this legislation will empower pharmacists to increase patients’ access to information and affordable and cost-effective medications,” stated APhA chief executive officer Tom Menighan. “We greatly appreciate the sponsors’ taking action to help our patients.”

B. Douglas Hoey, CEO of the National Community Pharmacists Association, said the issue is “symptomatic of a broader problem related to anticompetitive PBM practices” in the area of drug pricing transparency.

“Some practices of pharmacy benefit managers can inhibit the ability of pharmacists to assist patients in finding the lowest price for prescription drugs,” Hoey explained. “Thanks to this bipartisan effort, led by Sens. Collins and Stabenow, these two bills will enable pharmacists to inform patients who are insured under a variety of health plans of their best options.”

In commenting on the new legislation, the Pharmaceutical Care Management Association (PCMA), which represents the PBM industry, emphasized that it’s standard practice to help patients get the best price for their prescriptions.

“We support the patient always paying the lowest cost at the pharmacy counter, whether it’s the cash price or the copay. This is standard industry practice in both Medicare and the commercial sector,” PCMA said in a statement. “We would oppose contracting that prohibits drug stores 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 drug store. Fortunately, to the degree this issue was ever rooted in more than anecdotal information, it has been addressed in the marketplace.”


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