There might be a cheaper drug, but your pharmacist can’t tell you. Let’s fix it.
By Assemblyman Robert Auth
There is a good chance your pharmacist subject to a “gag rule” and prevented from telling you about cheaper drug prices.
A recent study published by the Journal of the American Medical Association estimates that nearly 25 percent of co-pays for filling prescriptions were higher than what insurers actually paid for the drugs. Similarly, a 2016 industry survey found that nearly 20 percent of pharmacists were prevented from telling their patients about cheaper options more than 50 times per month. These so-called gag rules are inserted into pharmacy contracts by pharmacy benefit management companies to reduce customer choice. Just the name sounds antithetical to caring for the consumer; and it is certainly not consumer friendly. The extra money from jacking-up the prices on select medications is kept by either the insurer or pharmacy benefits manager.
This secretive practice prohibits pharmacists from telling patients or caregivers about lower prices or cheaper drug options, such as generic drugs. Patients are never told that there could be a less expensive way to get their medicines because their pharmacist can’t talk about it without violating a contract.
Most insured consumers assume their co-pay is a discount from the full drug price. Unfortunately, that's not always so. Many patients end-up overpaying simply because many medicines are now available as low-cost generics, but PBMs require pharmacists to collect the full copay, regardless of a drug’s cash price.
Nearly 90 percent of filled prescriptions are for generics drugs. Some cost as little as $4. Meanwhile, typical employees must pay an $11 copay to fill a generic prescription, according to a Kaiser Family Foundation analysis.
The copay can be even higher for brand-name drugs, averaging $33 for preferred brands. An NBC investigation found one customer had a co-pay of $43 for a cholesterol drug, but the cost was only $19 without insurance. Another had a co-pay of $129 for an anti-depressant, while the price without insurance was only $18. It’s a total rip-off that inflates prescription prices. Many patients end up paying twice as much as they need to.
Too many people have expressed to me, with increasing frequency, their difficulty in affording the costs of medication prescribed by their physician. Some, already struggling with the high costs of living in New Jersey, have even said they often decide between paying their electric bills or their medication bills. This is a situation we cannot ignore. Pharmaceutical benefit managers originated as intermediaries to help process claims for health plans and allow insurers to combine their customer bases for greater leverage in negotiations with drug manufacturers. But over time, they became just another special interest.
Other states have taken action to pass legislation that prohibits gag rules. At least 21 states - such as Connecticut, Maryland and Florida - have banned contracts that restrict pharmacists from discussing prescription drug prices with patients, according to the National Conference of State Legislators. Louisiana became the latest in June. Unfortunately, New Jersey has not completed the task.
I joined a bipartisan group of lawmakers and co-sponsored legislation this year to end the practice. A-3993, which passed the Assembly insurance committee in June, would also prohibit PBMs from charging co-pays that exceed the cost. These “claw-backs” often target frequently prescribed drugs for diabetes, blood pressure, cholesterol, depression and anxiety.
Please call your legislators and ask them to support this bill. Until we get this legislation passed, there are steps you can take to make sure you aren’t overpaying. Always ask the pharmacist for the cash price of the drug. Gag clauses prohibit pharmacists from volunteering this information, but they can help you if asked directly.
Needlessly charging more for prescriptions by keeping patients in the dark is indefensible. It’s time we empower patients with more information and help pharmacists provide their customers with more transparency and potentially cheaper options.
Assemblyman Bob Auth is an insurance broker and small businessman who serves on the Assembly Financial Institutions and Insurance Committee. He represents parts of Bergen and Passaic counties in the 39th Legislative District.
