ShareThis Page
Business Headlines

To get around pharmacy gag rules, ask about drug costs

| Saturday, June 9, 2018, 12:24 p.m.
Most consumers assume their insurance will help them save money at the pharmacy. But sometimes using insurance can mean paying more and actually stop your pharmacist from offering a better deal.
Most consumers assume their insurance will help them save money at the pharmacy. But sometimes using insurance can mean paying more and actually stop your pharmacist from offering a better deal.

WASHINGTON — “Do you have prescription insurance?”

It's one of the first questions consumers hear at the pharmacy counter, and many hand over their insurance cards in the hopes of getting a good price. But sometimes using insurance can actually cost more — and even prevent the pharmacist from saying so.

That's because of so-called gag rules, which bar pharmacists from telling patients when they could save by paying cash instead of using insurance. The rules — set by companies that manage prescription plans — are getting new scrutiny after President Trump singled them out for criticism in his plan for lowering drug prices.

“This is a total rip-off, and we are ending it,” Trump said of the practice.

Here are some key points and tips to avoid overpaying for prescriptions:

Communication constraints

The gag rules are included in contracts between pharmacies and pharmacy benefit managers, companies that are hired to hold down prescription costs for insurers and employers. Some contracts limit the information pharmacists can share, including when a patient's copay exceeds a drug's cash price.

“When it comes down to making sure the patient can afford their medication, the gag clause prevents us from having that conversation so they can make the best informed decision,” said Randy McDonough, an Iowa pharmacist.

There are no official statistics on the restrictions, but a 2016 industry survey found that nearly 20 percent of pharmacists were limited by gag clauses more than 50 times per month.

Andy Soileau, a Louisiana pharmacist, recently testified before state lawmakers about the issue. He cited an example of a customer who was required to pay a $50 copay for generic birth control pills that would have cost $18 without insurance.

Last month, Louisiana became the latest of nearly 20 states to ban the restrictions.

Cheaper drugs, higher fees

Americans wind up overpaying for prescriptions because many medicines are now available as low-cost generics.

Nearly 90 percent of prescriptions filled in the United States are for generics drugs, some of which cost as little as $4. Meanwhile, the typical U.S. employee faces an $11 copay to fill a generic prescription, according to a Kaiser Family Foundation analysis. The copay is higher for brand-name drugs, averaging $33 for preferred brands.

Many pharmacy benefit managers require pharmacists to collect the full copay, regardless of a drug's cash price.

Stephen Schondelmeyer, who studies pharmaceutical economics at the University of Minnesota, said the pharmacy benefit managers tell pharmacists: “If we catch you telling patients you can buy this cheaper for cash, we will kick your pharmacy out of our network.”

How often?

A recent study in the Journal of American Medical Association estimated that for nearly 25 percent of prescriptions filled, copays were higher than what insurers actually paid for the drugs. That extra money is kept by insurers or the pharmacy benefits manager, according to the authors.

Insurers have long said that copays are used to reduce insurance premiums for all, bringing down overall health costs. And the industry group for pharmacy benefit managers says it opposes gag clauses and policies that lead to overpayments.

“We support the patient always paying the lowest cost at the pharmacy counter, whether it's the cash price or the copay,” the Pharmaceutical Care Management Association said in a statement.

Some of the largest pharmacy benefit managers, including Optum, say they do not use gag rules.

“If a pharmacy is not providing their cash price to our members, they are in violation of their contract,” said a spokesman for the company, which provides pharmacy benefits to 65 million people.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me