In March, Sen. Susan Collins, R-Maine, introduced the Patient Right to Know Drug Prices Act. Backed by a bipartisan group of lawmakers, the bill bans the “gag clauses” that prevent pharmacies from informing consumers whether they could spend less on their medication by paying the full price for an identical product produced by a different manufacturer.
The Patient Right to Know Drug Prices Act along with the Know the Lowest Price Act, sponsored by Sen. Debbie Stabenow, D-Mich., passed the House through voice vote last Tuesday. President Trump signed it into law on Wednesday.
Gag clause legislation has picked up momentum in the 2018 legislative year at the federal and state level. More than 20 states have enacted similar legislation.
The negative effects for the consumer have garnered agreement and action from both sides of the aisle in Congress, and most importantly the support of President Trump, who recently tweeted, “I support legislation that will remove gag clauses and urge the Senate to act.”
Contracts between a pharmacy and a pharmaceutical benefit manager (PBM), the third-party administrator for commercial health plans and a variety of health benefit programs, are a key feature in the sales and distribution of medications between drug manufacturers, pharmacies and consumers. However, details of these binding contracts are completely confidential and secret.
This lack of transparency has led to abuses in the drug supply chain. Gag clauses in PBM contracts with pharmacies have harmed consumers by increasing out-of-pocket expenses.
Many of my patients have had to forgo the purchase of medically necessary prescriptions due to increased out-of-pocket cost. Patients should be proactively given the best price for a prescription medication. The pharmacist should not be silenced by a gag clause, causing the patient to pay more than necessary.
The reasons for this lack of transparency are the gag clauses embedded in the contracts between PBM’s and individual pharmacies. Gag clauses prohibit the pharmacist from telling the consumer when a certain prescription drug costs less than it would with an insurance plan due to the contracts made with a PBM.
Not only do these contracts prohibit pharmacists from disclosing the cost, but they also can prevent the pharmacist from offering less costly but medically similar drugs. Aside from the complexity of the contracts between the PBMs and pharmacies, the ultimate takeaway from the legislation being passed is that Americans have been blatantly kept in the dark about less-expensive prescription drug options.
This information is easily accessed by the pharmacist, yet the consumer is unable to acquire this knowledge unless they specifically ask the pharmacist about the cost of the prescription without insurance.
These clauses created by PBMs prey on consumers’ assumptions that a prescription drug will always cost less if paid through their insurance plan. However, this is not the case. This practice has been handsomely profitable for the PBMs while harming consumers.
The Alliance for Transparent and Affordable Prescriptions (ATAP) is a coalition of patient and provider organizations that address the impact of PBMs on prescription drug costs and patient access to treatment. I serve as the president of this alliance.
We proudly support policymakers’ attempt to lower the enormous cost of prescription drugs in the United States by officially banning gag clauses.
We are pleased to see that President Trump supported this commonsense legislation, and urged the Senate to act quickly and in favor of banning these corrupt policies.
The fight to end the gag clause has been led by Sen. Collins, who watched as a couple walked out of a pharmacy without medication because their co-pay was too expensive. Collins called the gag clause “an egregious practice that causes people to pay more for their prescription drugs than they otherwise would.”
We support Sen. Collins in her hope that this minor policy change will help Americans stop overpaying for prescription drugs and demanding that PBMs provide more transparency to consumers.
Dr. Robert Levin is president of the Alliance for Transparent and Affordable Prescriptions.