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senate Bill S. 2554

Should Pharmacists be Allowed to Tell Customers Whether Using Insurance or Paying Out-of-Pocket is Cheaper?

Argument in favor

This bill would ensure full transparency when customers make purchasing decisions, and help them save money by paying less for their drugs. In some anecdotal cases, the difference is significant, such as in the case of a customer who paid $111 extra.

Jim2423's Opinion
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06/15/2018
100% yes. I know our pharmacist comes out from behind the counter and will point to a product but never says anything. Thank god for small town pharmacists.
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OurOnlyHope's Opinion
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06/15/2018
Of course pharmacists should be allowed to tell consumers how much stuff costs! With our current healthcare system it is almost impossible to make informed decisions when it comes to cost, which I suspect contributes to high healthcare costs. Themis gag rule should never have existed in the first place.
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operaman's Opinion
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06/15/2018
It's called full disclosure. Used to be that way, but Obama, through his greed towards Americans spoiled it for everyone. *Note: I'm sure this overcharge did happen, but not common. Pharmacists, as a group is ethical and honest.
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Argument opposed

Pharmacies try to negotiate aggressively low prices for drugs, so it should be the case that very few customers would pay less out of pocket than they would using their health insurance benefits. As a result, this bill may not make much of a difference.

eliyak's Opinion
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06/15/2018
Instead of interfering with private contracts, how about allowing reimporting cheap pharmaceuticals from other countries? That will do far more to lower prices than further interventions in the market.
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ShellySilver11's Opinion
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09/18/2018
We just need to take profit out of healthcare all together. Companies shouldn't be making money off of other people being sick. Other countries have figured this out, but we probably won't because insurance companies and Big Pharma lobby Congress to keep the status quo.
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Joseph's Opinion
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09/17/2018
This shouldn’t be a bill. Just get out of the healthcare industry all together and prices will go down and things will get better. Some political please be the sacrificial lamb and make a truly limited government like this country was founded on. Everyone will hate you but will make people work harder for there things. And better the United States economy.
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What is Senate Bill S. 2554?

This bill would lift the so-called “pharmacy gag clause,” which currently prohibits pharmacists from informing customers which of their two payment options — paying fully out of pocket or using their health insurance — would cost less for their prescriptions.

Impact

Prescription drug users; pharmacies; health insurance companies; and pharmacy benefit managers.

Cost of Senate Bill S. 2554

A CBO cost estimate for this bill is unavailable.

More Information

In-DepthSponsoring Sen. Susan Collins (R-ME) introduced this bill to protect patients from overpaying for prescription drugs:

“Insurance is intended to save consumers money.  Gag clauses in contracts that prohibit pharmacists from telling patients about the best prescription drug prices do the opposite. Multiple reports have exposed how this egregious practice has harmed consumers, such as one customer who used his insurance to pay $129 for a drug when he could have paid $18 out of pocket.  Americans have the right to know which payment method – insurance or cash – would provide the most savings when purchasing prescription drugs. By prohibiting gag clauses, our legislation would take concrete action to lower the cost of prescription drugs, saving consumers money.”

This bill is opposed by the health insurance industry and pharmacy benefit managers such as CVS Health, Express Scripts, or United Health. In a statement, the Pharmaceutical Care Management Association said:

“Pharmacy benefit managers (PBMs) typically reduce prescription drug costs by 30 percent for more than 266 million Americans enrolled in private and public plans, most notably Medicare Part D… PBMs use their substantial scale and expertise to negotiate aggressive rebates, discounts, and other price concessions from drug manufacturers and drugstores on prescription drugs.”

This bill has six cosponsors, including four Democrats and two Republicans. It also has the support of the American College of Rheumatology.


Of Note14 states have already ended pharmacy gag clauses. The range of states is across the partisan spectrum, and includes Minnesota, Connecticut, Mississippi, South Dakota, and Virginia.

The discrepancy between what patients pay out of pocket and what drugs actually cost is frequently created by “pharmacy benefit managers” (PBMs), companies hired by insurers to manage drug benefit programs and act as intermediaries between insurers, manufacturers, and pharmacies.

PBMs use their position to negotiate discounts, rebates, and other cost reductions from pharmaceutical companies in exchange for their drugs’ preferred placement on insurers’ formularies. The difference in price between the original price and the negotiated price, known as the “clawback,” is supposed to be passed on to patients — however, excess rebates and fees are often retained by PBMs rather than being passed on to patients. Consequently, patients’ out-of-pocket costs may not reflect the actual lower price of the drug.

As an example of how this might work:

  • A manufacturer might originally price a drug at $100. Then, a PBM negotiates that price down to $80. A pharmacy then purchases the drug from a wholesaler and the PBM pays the discounted rate to the pharmacy. The pharmacy pays a fee to the PBM for the negotiating service based on the drug’s list price ($100, rather than $80), bringing extra profit to the PBM.

  • The PBM may then charge the insurer a higher price for the drug ($90), even though it reimburses the pharmacy at the negotiated price. Simultaneously, the PBM also earns a rebate directly from the drug manufacturer for placing the drug on its formulary.

  • Finally, when a patient buys the drug from the pharmacy, he or she is charged a copay amount based on the list price ($100) rather than the negotiated price ($80). The co-payment may be higher than the cash price, and pharmacists are often prohibited from informing patients about this potential cost-saving opportunity due to PBM contracts.


Media:

Summary by Lorelei Yang

(Photo Credit: Steve Debenport / iStock)

AKA

Patient Right to Know Drug Prices Act

Official Title

A bill to ensure that health insurance issuers and group health plans do not prohibit pharmacy providers from providing certain information to enrollees.

bill Progress


  • EnactedOctober 10th, 2018
    The President signed this bill into law
  • The house Passed September 25th, 2018
    Passed by Voice Vote
  • The senate Passed September 17th, 2018
    Roll Call Vote 98 Yea / 2 Nay
      senate Committees
      Committee on Health, Education, Labor, and Pensions
    IntroducedMarch 14th, 2018

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    100% yes. I know our pharmacist comes out from behind the counter and will point to a product but never says anything. Thank god for small town pharmacists.
    Like (250)
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    Instead of interfering with private contracts, how about allowing reimporting cheap pharmaceuticals from other countries? That will do far more to lower prices than further interventions in the market.
    Like (48)
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    Of course pharmacists should be allowed to tell consumers how much stuff costs! With our current healthcare system it is almost impossible to make informed decisions when it comes to cost, which I suspect contributes to high healthcare costs. Themis gag rule should never have existed in the first place.
    Like (171)
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    Non issue if healthcare was free
    Like (125)
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    It's called full disclosure. Used to be that way, but Obama, through his greed towards Americans spoiled it for everyone. *Note: I'm sure this overcharge did happen, but not common. Pharmacists, as a group is ethical and honest.
    Like (81)
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    Several years ago I found out by accident that my insurance copay for a medication was higher than paying for it myself. The pharmacist refused to accept my payment without explanation. I refused the medication and went elsewhere and told the new pharmacy that I didn’t have insurance and got the lower price. Now that’s ridiculous!
    Like (56)
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    Why not, people should be able to make informed decisions which can’t happen when they aren’t privy to all applicable facts.
    Like (51)
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    Yes! Pharmacists are part of our healthcare team. To many people that makes the difference between getting the meds they need or not.
    Like (44)
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    We just need to take profit out of healthcare all together. Companies shouldn't be making money off of other people being sick. Other countries have figured this out, but we probably won't because insurance companies and Big Pharma lobby Congress to keep the status quo.
    Like (31)
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    Contrary to some comments that attribute this "gag clause" to President Obama, it is actually a clause inserted into medical/pharmacy insurance by the large insurance companies that prevents pharmacists from divulging that cash would cost less and the money generated by those insurers goes to pay lobbyists to further the policy to increase their profits - Some independent pharmacists stand to be put out of business by said insurers who have to sell some scripts below their cost just to be able to fill other prescriptions. The consumer deserves to know what the lowest possible price is so they can save their own money instead of padding the bottom line of the huge drug companies
    Like (20)
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    Helpin save people money is paramount to good customer service. And insurance today is a joke. I personally paid $1600 into the plan. I have a $2800 deductible on top of that. I went to get a prescription for my tooth infection and had to pay full price. Really, United Healthcare?? I thought okay. So I must have insurance in case I get cancer. But NO. There is separate insurance for that. The way I see it United Healthcare, you owe me $1600 + the $40 I had to pay even with insurance. So def save the customers $$$ since the insurance companies aren’t.
    Like (14)
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    This is where we are folks. You have to pass a law to require telling the truth.
    Like (12)
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    I cannot believe that there should even have to be a vote about this. So many people struggle to make ends meet, especially if they have major illnesses, the pharmacy should be able to do whatever they can to help.
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    Barring any provider from listing the prices of equivalent products seems like an infringement of free speech. Unless the effect of this is to incite riots over the price differences, there is no compelling reason in the public interest for restricting this information. And if the price differential is enough that revealing it would cause civil unrest, then it definitely needs to be revealed. I suspect in most cases and in practice this won’t make much difference to the consumer, but the principle of consumer interest in transparency outweighing corporate gag laws is important to publicly uphold.
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    Of course! DUH!!
    Like (10)
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    Yay in hopes of keeping medical costs down.
    Like (10)
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    ABSOLUTELY!
    Like (8)
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    Citizens deserve and need any breaks on pharmaceutical costs they can get and it's only fair they know the truth and their options.
    Like (8)
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    This shouldn’t be a bill. Just get out of the healthcare industry all together and prices will go down and things will get better. Some political please be the sacrificial lamb and make a truly limited government like this country was founded on. Everyone will hate you but will make people work harder for there things. And better the United States economy.
    Like (8)
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    This shouldn't even be a question, healthcare should be affordable, accessible, and transparent.
    Like (7)
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