On Wednesday, President Donald Trump signed legislation lifting contract clauses that have prevented pharmacists from informing patients they could pay less for prescription drugs by not using insurance, and paying the retail rate instead.
More than two dozen states had already enacted laws aimed at the “gag clauses,” as they’re referred to, according to the National Conference of State Legislatures’ Prescription Drug Resource Center. The clauses were included in contracts between pharmacies and some health insurers and pharmaceutical benefits managers to penalize pharmacists for speaking up.
The law Trump just signed was passed by Congress earlier this year with bipartisan support.
“It’s a matter of what’s fair for the patient,” said Will Edmiston, a pharmacist at Big Country Pharmacy in Abilene, Texas. “That’s what it should be about. Individuals have a right to know if there are cheaper alternatives.”
One word of caution: Just because pharmacists will now be able to give patients more information doesn’t mean they’ll all offer it up. It’s important for consumers to ask questions and advocate for themselves.
Millions of Americans Have Been Overpaying for Prescriptions
The University of Southern California’s Center for Health Policy and Economics found this year that in 23% of the claims it studied, patients overpaid. That’s 2.2 million cases of overpayment.
Another study by researchers at the Center for Health Policy and Economics and the University of Southern California, Los Angeles, found that in the first six months of 2013, Americans with Medicare coverage overpaid a total of $135 million, or $10.51 each.
Pharmacies collect patients’ copayments and forward them to pharmaceutical benefit managers, who reimburse the pharmacies at a negotiated rate. When a patient overpays, it means the copayment was larger than the negotiated reimbursement rate — sometimes more than the total cost of the drug.
The pharmaceutical benefit manager keeps the difference, and gag clauses in many pharmacists’ contracts prevented them from informing patients, researchers and consumer advocates say. Pharmaceutical benefit managers oversee most prescription drug benefits for insurers, employers and Medicare, according to AARP.
The overpayments contribute to people suffering medically as well as financially, the USC study found.
According to the USC study, “Many US patients struggle to afford their out-of-pocket healthcare expenses, and cost-related medication non-adherence is common, leading to higher medical expenditures and poorer health outcomes.”
Susan Jacobson is an editor for The Penny Hoarder. She also writes about health and wellness.
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