When cash price is less than insurance, should you be alerted?
If Rep. Maria Syms R-28 has her way, Arizona patients will soon find they have more choices and the opportunity for greater cost savings at the pharmacy. Rep. Syms is sponsoring a new bill that would allow patients and pharmacists to talk openly about whether to purchase medication using their insurance or pay for the medications themselves and would also allow pharmacists to inform patients of the availability of less-costly generic alternatives.
Why the need for this new law? Ask Pat Corum.
When the 72-year-old widow, who lives on Social Security, learned a medication she had recently been prescribed would be $100, she had to make the difficult choice to go without. Although her medication was a commonly prescribed drug with a variety of generics available, the Medicare copay was more than her fixed income budget could manage. She tried to fill her prescription again a few weeks later, hoping to find a more affordable generic, but to no avail. Again, she went without her medication.
A few months later, after moving to her daughter’s home in western Maricopa County and as the need for her medication intensified, she checked a local community pharmacy. Explaining she had been unable to afford the steep copay, she submitted her prescription and waited to hear the same response as before. To her surprise, the pharmacist informed her she’d do better to pay directly instead of relying on her Medicare copay. In a hushed voice – and warning that he was contractually restricted from sharing this information and could get in trouble if he was found out – he explained how, if she purchased the medication out of pocket instead of using her Medicare insurance, it would be only $10.
Pat was stunned. The drug she had gone without for months, the drug that cost $100 with her Medicare, was one-tenth the price in cash. She paid the $10 and resumed treatment of her condition, which had been stalled when she thought her only option was Medicare.
Pat’s experience is not a fluke occurrence or even especially rare. It is also not limited to Medicare. Patients often assume their copays are the best and cheapest option to purchase medication. By definition, “copay” means the patient is shouldering a portion of the drug cost.
The reality is copays are determined by Pharmacy Benefit Managers (PBMs) – the middlemen who are hired by insurance companies to administer the pharmacy portion of a patient’s health insurance. PBMs negotiate contracts with insurers, pharmaceutical manufacturers and pharmacies. When a patient’s copay is higher than the out-of-pocket “cash” price, it is the PBM who pockets the difference – not the pharmacy. But pharmacists can’t tell their patients when the cash price is cheaper because of “gag clauses” – strong contractual language that prohibits pharmacies from disclosing certain information or risk penalties.
While clawbacks have existed for years, the practice has only recently gained local and national attention as drug prices continue to rise and patients are left scrambling to pay the bill. Legislators at the state and federal level have begun to closely scrutinize the role PBMs play in the drug pricing equation, discovering secretive practices like patient copay clawbacks along the way.
If HB2107 passes this legislative session, Arizona consumers may find relief and drug cost savings as their right to openly discuss options is restored and they are free to decide whether to use their insurance or pay the out-of-pocket “cash” price.
Rep. Sym’s bill would prohibit and prevent the use of gag clauses, restoring a patient’s right to understand his or her options and choose accordingly. If passed, the new bill would promote patient compliance with taking their medications and help prevent patients from losing access to medications because they couldn’t afford to purchase them or didn’t know about the availability of lesser priced alternatives.
HB2107 has passed out of the Arizona House and is now in the Senate. It is expected to be heard in committee within the next two weeks and then, if it receives support in the AZ Senate, should move through the process of becoming law.
Interested consumers can follow the progress of HB2107 on the website of the Arizona Legislature at www.azleg.gov and show their support by contacting Rep. Syms at email@example.com.
Monique Whitney is the communications director for Pharmacists United for Truth and Transparency.