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Maryland to fight pharmacist ‘gag rule’ on drug costs

Washington Examiner
January 9, 2018
Robert King

Maryland wants to eliminate a “gag rule” that prevents pharmacists from telling consumers that they can pay less for their prescription drugs, joining a nationwide movement to rein in soaring costs.

If Maryland succeeds, it would mean that pharmacies would be allowed to inform customers they can pay less for a drug out of pocket than through their insurance. Maryland would join five other states — Connecticut, Maine, Louisiana, North Dakota, and Georgia — that have banned the “gag rule” that some pharmacy benefit managers put in their contracts with pharmacies.

Congress also is targeting the “gag rule,” with lawmakers on both sides of the aisle supporting the move in an effort to attack high drug prices.

The issue is that a customer can pay less for a drug if he pays out-of-pocket instead of using insurance if the co-pay set by the pharmacy benefit manager is higher than the cost of the drug. However, the pharmacy benefit manager’s contract provisions prohibit pharmacists from telling the consumer about that option.

“It is this problem of pharmacists being prohibited from telling people that the price is lower from out-of-pocket insurance price,” said Vinny DeMarco, president of Maryland Citizens’ Health Initiative, which is pushing the legislation this year.

DeMarco said he doesn’t know how many drugs are affected by a benefit manager’s gag rule. “We don’t know because these documents aren’t public,” he said.

Maryland State Del. Eric Bromwell, a Baltimore County Democrat, is working on the legislation, and DeMarco hopes to get it passed this year. He points to success last year in getting a law signed that lets the state attorney general prevent price gouging by major drugmakers. The pharmaceutical industry sued to stop the law from taking effect, but that was unsuccessful.

The model for the “gag rule” legislation is a new law in Connecticut.

That law, which went into effect on Jan. 1, bans pharmacy managers from issuing gag orders. It follows several lawsuits that challenge pharmacy benefit managers over the clauses, according to a report in Bloomberg.

The Pharmaceutical Care Management Association, the trade association for pharmacy benefit managers, told the Washington Examiner that it supports “the patient paying the lowest price available at the pharmacy counter for the prescribed drug.”

The contract “gag rules” are drawing the attention of Congress as lawmakers turn to more avenues to combat high drug prices.

Congress made a few moves to combat rising drug prices last year, focusing mainly on spurring more development of generics to combat costly brand-name drugs. It has not addressed several other Democratic-led reforms, including giving Medicare the power to negotiate for lower drug prices and allowing Americans to buy cheaper drugs from Canada.

Legislation to tackle high drug prices so far has not been high on the GOP’s legislative agenda for 2018, as other issues such as immigration, infrastructure, and welfare reform crowd out time in an election year.

But Democrats want to target the pricing again this year.

“We’ve gotta find ways to bring down the cost of prescription drugs,” said Sen. Elizabeth Warren, D-Mass.

While Republicans have resisted Democratic reforms, the idea of ending the “gag rule” for pharmacies has received support from both Republicans and Democrats.

“Sometimes, pharmacists have gag orders they can’t tell the patient it is cheaper to pay cash than go through your plan. That is crazy,” said Sen. Bill Cassidy, R-La., in late December. “Louisiana has outlawed those, but [in] most states [they] are still allowed. There would be bipartisan support on that.”

Sen. Susan Collins, R-Maine, also advocated eliminating gag orders during a Senate committee hearing last month.

DeMarco said he isn’t expecting much to be done in Washington, leaving states to pick up the slack.

“Nothing is going to happen on the federal level on this issue. Maryland needs to act,” he said.

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