“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 Donald Trump singled them out for criticism in his plan for lowering drug prices.
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.
A 2016 industry survey found that nearly 20 percent of pharmacists were limited by gag clauses more than 50 times per month.
Americans wind up overpaying for prescriptions because many medicines are now available as low-cost generics.
Nearly 90 percent of prescriptions filled in the U.S. are for generic 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 for brand-name drugs, averages $33.
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 are Americans overpaying?
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 said it opposes gag clauses and policies that lead to overpayments.
Some of the largest pharmacy benefit managers, including Optum, said they do not use gag rules.
Experts said there are easy steps consumers can take to make sure they aren’t overpaying for drugs:
• Always ask the pharmacist for the cash price of the drug. They can generally respond if asked directly.
• Shop around. Some pharmacies offer lower cash prices than others. Use websites or apps like GoodRx to research cash prices at nearby pharmacies.
Matthew Perrone writes for the Associated Press.