In the United States, where prescription drugs are not price-regulated by one, powerful agency, such as the federal government, smaller insurance companies must negotiate with these large drug makers. What the drug makers have found is, they have the upper hand. As many of us know, any drug in the U.S. costs significantly more than the same drug elsewhere.
Nothing makes the cost of prescription drugs more real than standing in front of the pharmacist when they give you the total. For that reason, it's common that pharmacists get the blame. Until recently, pharmacists were unable to even disclose cheaper alternatives to the drugs they prescribed. That has changed thanks to the bipartisan efforts of several senators. The Patients Right to Know Drug Prices Act allows pharmacists to share pricing information with customers on employer-sponsored and health care exchange plans, without penalty.
Many people are saying that the passing of this bill is a step in the right direction.
How did the clause come into effect?
Those in the pharmaceutical industry, such as Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, say that these gag orders were not condoned, and only used on rare occasions. Merritt's comments are at direct odds with Thomas E. Menighan, the chief executive of the American Pharmacists Association. Menighan, in response to Merritt's comments, argued that these gag orders were commons under many contracts between the pharmacist and the pharmacy benefit manager (PBM).
The role of a PBM is to reduce prescription drug costs, but some argue that the PBM benefits from this practice.
One Pharmacist's testimony
Standing before the House Health subcommittee, Hugh Clancy, RPh, described receiving criticism for advising the mayor, a client of the pharmacy, on a cheaper option for his prescription drug. Upon the mayor calling his plan to explore the price discrepancy further, the PBM was made aware. Clancy testified to the subcommittee that his PBM called and issued a verbal warning that he was in violation of their contract for "...disparaging the plan when we discussed the cost of a drug off insurance. We were told that if our pharmacy were to do so again, there would be consequences, including exclusion from PBM networks."
What ending the gag clause means to consumers is more transparency. What ending the gag clause means for the cost of prescription drugs is less clear.