June 19, 2018

Tanzi bill would free pharmacists to help consumers save on prescriptions

STATE HOUSE – Rep. Teresa Tanzi has sponsored pro-consumer legislation that would prohibit gag clauses in pharmacy benefit manager contracts that prohibit pharmacists from telling consumers about cheaper ways to purchase prescriptions or more effective alternatives. Additionally, the legislation would prevent the use of "clawbacks" in pharmacy benefit manager (PBM) contracts and would protect small or independent pharmacies by prohibiting PBM’s from using logos of any particular pharmacy on prescription or health plan cards.

The legislation (2018-H 7700), which was heard in the House Health, Education and Welfare Committee, is meant to save consumers money as well as to protect the integrity of the relationship between pharmacists and patients. 

“No corporation looking to maximize its profits should be able to tell a pharmacist they can’t tell their patients about information they know will help them save money or feel better. Gag clauses are damaging to the pharmacist-patient relationship and are a corporate money grab that hurts consumers,” said Representative Tanzi (D-Dist. 34, South Kingstown, Narragansett). “My legislation will make them illegal so pharmacists will not be muzzled and consumers will be given the knowledge they need to save money.”

Currently, pharmacy benefit managers (PBMs) — the middlemen who handle drug claims for health insurers — can include gag clauses in their contracts with pharmacies that prohibit pharmacists from alerting patients when their copay is higher than the price of a drug, or when there is a less-expensive or more effective drug they could be using. PBMs’ motivation for gag clauses is that when consumers’ copays are higher than the costs of their drugs, PBMs are able to collect the difference from the pharmacy. For example, a patient might have a $15 copay for a prescription for which the pharmacy charges $7.22. The PBM is allowed to “claw back” the remaining $7.78 from the pharmacist.

A study released last month by the University of Southern California Schaeffer Center for Health Policy & Economics found that patients unwittingly overpay for their prescriptions in this manner 23 percent of the time.

Prior to the introduction of gag clauses, pharmacists could tell patients when they would save money by buying their prescriptions outright, instead of going through their insurance and paying the copay. Pharmacists were also free to alert patients when there’s a generic or a lower-priced alternative to the drug they’ve been prescribed.

According to the National Conference of State Legislatures, 13 states have enacted laws prohibiting gag clauses in PBMs’ contracts with pharmacies.

The Rhode Island Pharmacists Association supports the legislation.

“As a pharmacist practicing in Rhode Island for 20 years, I was shocked when I learned that my colleagues in community pharmacies are not able to help patients find the lowest cost option for their prescriptions if they enter into a contract with a PBM. The practice of facilitating all aspects of a patient’s care, including affordable medications, has been part of our profession for generations. PBM contracts should not be able to erode the trust and open communication between a patient and a pharmacist,” said Anita N. Jacobson, legislative team chairwoman and past president of the Rhode Island Pharmacists Association.

Representative Tanzi spoke about the bill at the Faces of Pharmacy event today at the State House, when pharmacists and pharmacy students visited the State House to discuss issues affecting the industry with legislators.