Credit: George Danby

At a meeting with Maine pharmacists last fall, I first learned about an egregious practice imposed on some pharmacists that can cause their patients to pay much more for prescription drugs when using insurance than they otherwise would have if they had paid out of pocket. Known as “gag clauses,” these terms, included in some contracts between insurance companies or their pharmacy benefit managers and pharmacies, actually prohibit pharmacists from informing consumers if their prescription would cost less if they paid for it themselves rather than using insurance.

A study published in the Journal of the American Medical Association that reviewed 9.5 million insurance claims found that 23 percent of prescriptions filled through insurance ended up costing more for customers than if they had paid out of pocket.

Many pharmacists express frustration that they are unable to disclose this information unless customers specifically ask. But that question is so counterintuitive that few consumers would think to ask.

How can it be that an insurance company’s prescription benefit manager, whose very job is to negotiate prices, is negotiating a price that may actually be higher than what the consumer would pay out of pocket?

By concealing the least costly way to purchase a prescription drug, gag clauses reduce the affordability of essential medicines. For more and more Americans, rising drug prices are precluding them from obtaining the prescription drugs they need.

I recently saw this firsthand at a pharmacy near my home in Bangor. Standing in line behind a couple who was also there to pick up a prescription, I couldn’t help but overhear the pharmacist when he told the couple that their copay would be $111. Visibly disturbed, they looked at each other, the husband said to his wife, “We can’t afford that,” and they walked away.

Concerned by what I had just witnessed, I asked the pharmacist how often high costs prevent patients from buying a needed prescription. His answer? It happens every day.

[When buying prescription drugs, some pay more with insurance than without it]

As a senator representing the oldest state in the nation by average age, I am particularly concerned about the rising cost of prescription drugs. Nearly 60 percent of Americans, including roughly 90 percent of seniors, take at least one prescription drug. For many, access to these prescription drugs is not only critical to their quality of life, but can literally be a matter of life or death.

Americans spend an estimated $340 billion on prescription drugs each year, including a staggering $45 billion out of pocket. Because of this enormous expense, one out of five Americans do not fill a prescription because they are unable to afford it.

This can have dire consequences for patients who are forced to go without the vital medications their doctors have prescribed, potentially causing their condition to worsen. Some skip doses or hoard pills out of fear that their next refill will be unaffordable. Many are filled with anxiety as they watch prices climb, worried that they could lose access to medications they need.

Shortly after my meeting with the Maine pharmacists, the Senate Health Committee held a hearing on the cost of prescription drugs where I raised the issue of gag clauses. One witness from the American Pharmacists Association testified that gag clauses are common. Following that hearing, I wrote the bipartisan Patient Right to Know Drug Prices Act to prohibit gag clauses. This legislation was unanimously approved by the committee on July 25.

This bill would prevent the use of pharmacy gag clauses in health insurance plans provided by employers as well as those offered in the individual market, including through the Affordable Care Act exchanges. In addition, it broadly defines out-of-pocket costs to prevent companies from using clever contract language to get around the gag clause prohibition. Forty health care and patient advocacy organizations support our legislation.

Following the introduction of my bill, the Trump administration condemned gag clauses, identifying them as a barrier to reducing out-of-pocket costs for consumers. I am also pleased that the Centers for Medicare and Medicaid has put Part D Medicare plan sponsors on notice that such clauses are now unacceptable.

Insurance is intended to save consumers money. Gag clauses that prohibit pharmacists from telling patients about the best prices do the opposite. Who would think that using your debit card to pay for your prescription would be less expensive than using your insurance card?

Patients have the right to know which payment method is most affordable for them. By prohibiting gag clauses, my legislation would lower the cost of prescription drugs, saving consumers money and helping them get the medications they need.

Susan Collins represents Maine in the U.S. Senate.

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